Peer-To-Peer News - The Week In Review - February 24th, '07

[JackSpratts]

"So, what have we got here? An adequately secure version of Windows, finally? I think not." – Thomas C Greene


"The entire plane entertainment system goes down (and thankfully the cascading system failure didn't spill over to the plane navigation system)!" – Hugh Thompson


"People do get better at many things in their 40s. The odds were against thrash-metal being one." – Ben Ratliff


"Despite that unfortunate house-on-woman matter, Mr. Raabe says his days in Oz were among the happiest of his life." – Dan Barry


"I find it peculiar that Apple would launch a flagship product without securing its own trademark first." – Yuval Barzakay


"In a sense, the letter is asking us to pursue an investigation, and as the service provider we don't see that as our role." – Steve Tally


"You know, downloading is such a part of student culture that college kids will never stop." – Loren Halman



































February 24th, 2007






US Copyright Lobby Out-Of-Touch

Internet law professor Michael Geist takes a look at intellectual property protection in the US and finds it somewhat out of step with the rest of the world.

The International Intellectual Property Alliance, an association that brings together US lobby groups representing the movie, music, software, and publisher industries, last week delivered its annual submission to the US government featuring its views on the inadequacy of intellectual property protection around the world.

The report frequently serves as a blueprint for the US Trade Representative's Section 301 Report, a government-mandated annual report that carries the threat of trade barriers for countries that fail to meet the US standard of IP protection.

The IIPA submission generated considerable media attention, with the international media focusing on the state of IP protection in Russia and China, while national media in Canada, Thailand, and Taiwan broadcast dire warnings about the consequences of falling on the wrong side of US lobby groups.

While the UK was spared inclusion on this year's list, what is most noteworthy about the IIPA effort is that dozens of countries - indeed most of the major global economies in the developed and developing world - are singled out for criticism.

The IIPA recommendations are designed to highlight the inadequacies of IP protection around the world, yet the lobby group ultimately shines the spotlight on how US copyright policy has become out-of-touch and isolated from much of the rest of the globe.

The IIPA criticisms fall into three broad categories. First, the lobby group is very critical of any country that does not follow the US model for implementing the World Intellectual Property Organisation's Internet Treaties.

Those treaties, which create legal protection for technological protection measures, have generated enormous controversy with many experts expressing concern about their impact on consumer rights, privacy, free speech, and security research.

Double standards?

The US implementation, contained in the 1997 Digital Millennium Copyright Act, represents the world's most aggressive approach to the WIPO Internet Treaties, setting very strict limits on the circumvention of digital rights management systems and establishing a ban on devices that can be used to circumvent DRM, even if the circumvention is for lawful purposes.

Given the US experience, it is unsurprising that many countries have experimented with alternate implementations.

This experimentation invariably leads to heavy criticism from the IIPA as countries such as Canada, New Zealand, Japan, Switzerland, Hong Kong, South Korea, Israel, Mexico, and India are all taken to task for their implementation (or proposed implementation) of anti-circumvention legislation.

Further, countries that have not signed or ratified the WIPO Internet treaties (which still includes the majority of the world), face the wrath of the US lobby group for failing to do so.

Second, in a classic case of "do what I say, not what I do", many countries are criticised for copyright laws that bear a striking similarity to US law. For example, Israel is criticised for considering a fair use provision that mirrors the US approach.

The IIPA is unhappy with the attempt to follow the US model, warning that the Israeli public might view it as a "free ticket to copy." Similarly, the time shifting provisions in New Zealand's current copyright reform bill (which would permit video recording of television shows) are criticised despite the fact that US law has granted even more liberal copying rights for decades.

The most disturbing illustration of this double standard is the IIPA's criticism of compulsory copyright licensing requirements.

Countries around the world, particularly those in the developing world (including Indonesia, the Philippines, Lebanon, Kuwait, Nigeria, and Vietnam) all face demands to eliminate compulsory licensing schemes in the publishing and broadcasting fields.

Moreover, the report even criticises those countries that have merely raised the possibility of new compulsory licensing systems, such as Sweden, where politicians have mused about an Internet file sharing license.

Long list

Left unsaid by the IIPA, is the fact that the US is home to numerous compulsory licenses.

These include statutory licenses for transmissions by cable systems, satellite transmissions, compulsory licenses for making and distributing phonorecords as well as the use of certain works with non-commercial broadcasting.

Third, the IIPA recommendations criticise dozens of efforts to support national education, privacy, and cultural initiatives.

For example, Canada, Brazil, and South Korea are criticised for copyright exceptions granted to students and education institutions.

Italy and Mexico are criticised for failing to establish an easy method for Internet service providers to remove allegedly infringing content (without court oversight), while Greece is viewed as being offside for protecting the privacy of ISP subscribers.

Greece is also taken to task for levying a surcharge at movie theatres that is used to support Greek films.

Moreover, countries that have preserved their public domain by maintaining their term of copyright protection at the international treaty standard of life of the author plus an additional fifty years are criticised for not matching the US extension to life plus 70 years.

There are literally hundreds of similar examples, as countries from Europe, Asia, Africa, North and South America are criticised for not adopting the DMCA, not extending the term of copyright, not throwing enough people in jail, or creating too many exceptions to support education and other societal goals.

In fact, the majority of the world's population finds itself on the list, with 23 of the world's 30 most populous countries targeted for criticism (the exceptions are the UK, Germany, Ethiopia, Iran, France, Congo, and Myanmar).

Countries singled out for criticism should not be deceived into thinking that their laws are failing to meet an international standard, no matter what US lobby groups say.

Rather, those countries should know that their approach - and the criticism that it inevitably brings from the US - places them in very good company.
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/6379309.stm





Music Industry Tries to Enlist Schools in Piracy Crackdown
Ted Bridis

In a crackdown on college students, the music industry is sending thousands more complaints to top American universities this school year than it did last year as it targets music illegally downloaded over campus computer networks.

A few schools, including Ohio and Purdue universities, already have received more than 1,000 complaints accusing individual students since last fall — significant increases over the past school year. For students who are caught, punishments vary from e-mail warnings to semester-long suspensions from classes.

The trade group for the largest music labels, the Recording Industry Association of America, identified the 25 universities that received the most copyright complaints it sent so far this school year. The group long has pressured schools to act more aggressively against online pirates on campus.

"It's something we feel we have to do," Cary Sherman, president of the association, said. "We have to let people know that if they engage in this activity, they are not anonymous."

The top five schools are Ohio, Purdue, the University of Nebraska-Lincoln, the University of Tennessee and the University of South Carolina. The recording industry group complained about almost 15,000 students at those 25 universities, nearly triple the number for the previous school year.

"They're trying to make a statement," said Randall Hall, who polices computers at Michigan State University, seventh on the list with 753 complaints. Michigan State received 432 complaints in December alone, when students attended classes for only half the month.

Hall meets personally with students caught twice and forces them to watch an eight-minute anti-piracy DVD produced by the recording group. A third- time offender can be suspended for a semester.

"I get the whole spectrum of excuses," Hall said. "The most common answer I get is, 'All my friends are doing this. Why did I get caught?'"

At the University of Massachusetts at Amherst — which received 897 complaints — first- and second-time offenders receive escalating warnings about piracy. After a third complaint, the school unplugs a student's Internet connection and sends the case to a dean for additional punishment.

Each complaint represents an accusation that a student was identified sharing a single song over the campus network. The recording industry group files civil lawsuits against egregious offenders, who make available hundreds or thousands of songs to other students online. Unlike lawsuits, formal complaints are typically sent to colleges every day by e-mail messages.

The music group said each university should set its own penalties for illegal downloading. "When we look at the problem, it's particularly acute in the college context," the RIAA chief executive, Mitch Bainwol, said.

The association said popular software programs it has targeted at schools include AresWarez, BitTorrent, eDonkey and other programs that operate on the Gnutella and FastTrack services.

Under U.S. law, universities that receive complaints about students illegally distributing copyrighted songs generally must act to stop repeat offenders or face legal action. The entertainment industry typically can identify a student only by his or her numerical Internet address and must rely on the school to correlate that information with its own records to trace a person's real- world identity.

Some schools aggressively warn students after they receive complaints. Others do not. Purdue, which has received 1,068 complaints so far this year after only 37 in 2006, said it rarely even notifies the accused students because it is too much trouble to track down alleged offenders. Purdue said its students were not repeat offenders.

"In a sense, the letter is asking us to pursue an investigation, and as the service provider we don't see that as our role," a spokesman, Steve Tally, said of the association's complaint letters. "We are a leading technology school with thousands and thousands of curious and talented technology students."
http://www.baltimoresun.com/technolo...logy-headlines





Ohio U Is Number 1!

US Crackdown on Students' Illegal Downloads
Conor Clarke

The US recording industry today embarked on a new drive against illegal music downloading on campuses throughout America.

The Recording Industry Association of America, which represents around 90% of music companies, has drawn up a list of the universities with the worst offenders and bombarded the university authorities with complaints.

Jonathan Lamy, a spokesman for the RIAA, said students were the worst offenders, adding: "We know that piracy is most acute on campuses. Students have high-speed access, and have more time than money."

The RIAA, which has in the past taken out lawsuits against offenders, can identify individual computers on campuses from which the music is being downloaded for free, but not the students.

Universities are expected to take action ranging from revoking the rights of students to use campus computers to forcing them to watch eight-minute education videos about piracy.

The RIAA has sent out 15,000 complaints - triple the number it sent out the previous academic year - to 25 universities identified as having the most offenders.

Some earlier RIAA campaigns against the wider public have ended in embarrassing failure. The most notable mishap was a subpoena served on 83-year-old Gertrude Walton, a grandmother alleged to have been swapping rap music.

However, Mr Lamy defended past attempts at tackling piracy, saying: "We believe our previous deterrent efforts have made an impact. A lot of illegal operations have gone."

He said there were a number of reasons why people had stopped, and that one of those was the fear of a lawsuit.

Piracy, he added, was a "primary reason" for a sharp decline in music sales between 1999 and 2005.

Some critics claim the RIAA acts as a cartel that pays only a tiny percentage of profits to the artists. They also argue that downloading actually increases artists' exposure and, as a result, increases legitimate sales.

Others say downloads should be free and that artists and companies could make money through advertising on the sites.

Steve Jobs, the chief executive of Apple, the company responsible for the iPod, this month urged record companies to begin selling songs online without copy protecton.

Some universities have adopted a relaxed approach to the complaints, saying it is not their job to police piracy, but others are trying to co-operate.

Jessica Stark, the media relations co-ordinator for Ohio university, which had the highest number of complaints last year, said the university respected intellectual property rights.

Asked why illegal downloading was so prevalent at Ohio, she said: "We do have an open network, we do have a student body that's very well connected to the internet - and that's a problem."

The university tried to educate students, with periodic reminders about copyright laws, and was working with a technology company in an effort to make legal downloads affordable.

But Ms Stark added: "We can and do shut off their network access, and we send them warnings, and we can suspend them."

Some students are sceptical about the crackdown. Loren Halman, a student at the University of Massachusetts at Amherst, which was identified as the sixth worst offender, said: "You know, downloading is such a part of student culture that college kids will never stop."
http://technology.guardian.co.uk/new...018226,00.html





RIAA Appeals Attorneys' Fees Award
Eric Bangeman

The cartel of record companies in Capitol v. Foster have filed a motion for reconsideration of US District Court Judge Lee R. West's decision to award the defendant Debbie Foster attorneys' fees. In it, the plaintiffs lay out their disagreement with the judge's reasoning while taking time to point out that the fees awarded far exceed any damages they could have recovered should their suit have been successful.

Although the RIAA is careful to take issue with all of Judge West's conclusions, its primary concern is his ruling on secondary infringement.

Throughout its legal attacks on file sharers, the RIAA has argued that the owners of ISP accounts used to share copyrighted material should be held liable, even if they had no knowledge of the alleged infringement. Judge West called the RIAA's secondary infringement claims "untested and marginal" in his order, a characterization the labels take issue with.

Instead, the plaintiffs argue that if the defendant has "a reason to know" of the infringing activity, she should be held liable. The RIAA also points to Foster's subscriber agreement with Cox Communications, her ISP, which the RIAA says "expressly required" her to keep others using her account from infringing copyrights.

The RIAA also bemoans what it calls the premature end of the discovery process: "Finally, plaintiffs believe that discovery would have revealed substantial other evidence of defendant's knowledge and material assistance in the underlying infringements. For example, the computer may well have been in a common area such that defendant heard music coming from the computer when admitted infringer Amanda Foster was using it," argues the RIAA. That's right... the RIAA is arguing that mere act of listening to music on one's PC is evidence of copyright infringement.

Awarding attorneys' fees to Debbie Foster would do little more than reward the defendant for choosing to "litigate long after this case should have been dismissed," according to the motion. The record labels say that Foster failed to take advantage of the plaintiffs' offers to "end this litigation without paying anything." Instead, she chose to fight the lawsuit vigorously in hopes of clearing her name completely. The RIAA also argues that should the attorneys' fees award stand, it would deter other copyright owners from pursuing infringement claims.

This is an important issue for the RIAA and the stakes are high. Even if the RIAA changes its legal tactics and decides not to press secondary infringement claims in future lawsuits, there are still numerous lawsuits wending their way through the courts where the record labels have used the exact same tactics seen in Capitol v. Foster. The labels recognize this, noting that "defense counsel in other cases like this across the country are already citing the Court's statement, albeit out of context, in an effort to suggest that this Court has found that contributory and vicarious infringement claims in cases like this one are not viable." Should other courts find Judge West's reasoning applicable to their cases, the RIAA is at risk of writing a lot of large checks, drastically tilting the risk-reward equation in the wrong direction for them.
http://arstechnica.com/news.ars/post/20070222-8902.html





Warez Leader Faces 10 Years in Jail
enigmax

After spending nearly 3 years in a detention center fighting his extradition from Australia, a leader of notorious warez group ‘DrinkorDie’ was yesterday arraigned before a U.S. District Court to face charges of conspiracy to commit criminal copyright infringement and one count of actual criminal copyright infringement. If found guilty he faces 10 years in jail & a $500,000 fine.

Founded in Moscow in 1993, DrinkorDie (DoD) was a major underground warez network who, amongst many other achievements (including the release of their own DVD ripper) embarrassed Microsoft by pre-releasing Windows95 2 weeks before its official launch. DoD consisted mainly of university undergraduates and was heavily supported by employees of software houses, whose role would be to leak copies of software to the group.

Considered by many to have reached their peak before the dawn of 1997, DoD remained firmly on the FBI’s radar. In 2000, U.S. Immigration and Customs began their investigation into DOD and other warez networks such as RiSC, RAZOR1911, RiSCISO, Request To Send (RTS), ShadowRealm (SRM), WomenLoveWarez (WLW), and POPZ. In 2001 DoD was busted during US Customs co-ordinated raids as part of Operation Buccaneer.

More than seventy search warrants were carried out globally across 12 countries, including raids in the US, Australia, Great Britain, Finland, Norway and Sweden with the subsequent arrest of 65 people.

The investigation claimed to have revealed two leaders of DoD. The first, 28 year old US citizen John Sankus Jr from Philadelphia aka ‘eriFlleH’ was convicted and sentenced in 2002, receiving 46 months in a federal prison (along with co-conspirator, Barry Erickson, who was sentenced to 33 months). At the time, US Attorney Paul McNulty said “John Sankus and his techno-gang operated in the faceless world of the internet and thought they would never be caught. They were wrong. These sentences, and those to follow, should send a message to others entertaining similar beliefs of invincibility.”

The second leader is claimed to be 44 year old Hew Raymond Griffiths, a British national and previous resident of Bateau Bay, Australia. After fighting extradition to the US from an Australian detention center for the last 3 years, Griffiths finally lost his battle in the Australian courts and yesterday was brought before Magistrate Judge Barry R. Poretz sitting in U.S. District Court, Alexandria, Va.

According to the indictment, it is claimed that Griffiths, aka “Bandido,” was an established leader of DrinkOrDie and a major player in the ‘warez’ scene. It is claimed that he also held important positions in other warez groups including Razor1911 and RiSC.

“Griffiths claimed to be beyond the reach of U.S. law, and today, we have proven otherwise,” said Assistant Attorney General Alice Fisher. “This extradition represents the Department of Justice’s commitment to protect intellectual property rights from those who violate our laws from the other side of the globe.”

“Our agents and prosecutors are working tirelessly to nab intellectual property thieves, even where their crimes transcend international borders,” said U.S. Attorney Chuck Rosenberg.

The Court claims that prior to its dismantling, DrinkOrDie was estimated to have enabled the illegal reproduction and distribution of more than $50 million worth of pirated media including software, movies, games and music.

However, its is worth noting that it has never been proven that any member of DoD profited financially from their activities. Indeed, at the trial of other DoD members in the UK in May 2005, Bruce Houlder QC, prosecuting, said he acknowledged that the defendants were not involved in the software piracy scene to make money but rather they saw themselves as latter-day Robin Hoods, stealing from the rich to give to the poor.

For many in the warez scene and beyond, this is how DoD will be remembered.
http://torrentfreak.com/warez-leader...years-in-jail/





Driver’s License Emerges as Crime-Fighting Tool, but Privacy Advocates Worry
Adam Liptak

On the second floor of a state office building here, upstairs from a food court, three facial-recognition specialists are revolutionizing American law enforcement. They work for the Massachusetts motor vehicles department.

Last year they tried an experiment, for sport. Using computerized biometric technology, they ran a mug shot from the Web site of “America’s Most Wanted,” the Fox Network television show, against the state’s database of nine million digital driver’s license photographs.

The computer found a match. A man who looked very much like Robert Howell, the fugitive in the mug shot, had a Massachusetts driver’s license under another name. Mr. Howell was wanted in Massachusetts on rape charges.

The analysts passed that tip along to the police, who tracked him down to New York City, where he was receiving welfare benefits under the alias on the driver’s license. Mr. Howell was arrested in October.

At least six other states have or are working on similar enormous databases of driver’s license photographs. Coupled with increasingly accurate facial-recognition technology, the databases may become a radical innovation in law enforcement.

Other biometric databases are more useful for now. But DNA and fingerprint information, for instance, are not routinely collected from the general public. Most adults, on the other hand, have a driver’s license with a picture on it, meaning that the relevant databases for facial-recognition analysis already exist. And while the current technology requires good-quality photographs, the day may not be far off when images from ordinary surveillance cameras will routinely help solve crimes.

Critics say the databases may therefore also represent a profound threat to privacy.

“What is the D.M.V.?” asked Lee Tien, a lawyer with the Electronic Frontier Foundation and a privacy advocate. “Does it license motor vehicles and drivers? Or is it really an identification arm of law enforcement?”

Anne L. Collins, the Massachusetts registrar of motor vehicles, said that people seeking a driver’s license at least implicitly consent to allowing their images to be used for other purposes.

“One of the things a driver’s license has become,” Ms. Collins said, “is evidence that you are who you say you are.”

The databases are primarily intended to prevent people from obtaining multiple licenses under different names. That can help prevent identity theft and stop people who try to get a second license after their first has been suspended.

“The states are finding hundreds of cases of fraud each year in each state,” said J. Scott Carr, executive vice president of the Digimarc Corporation, which says it has sold biometric technology to motor vehicle departments in seven states and has a role in the production of more than two-thirds of all driver’s licenses in the United States.

But the databases can also be used for law enforcement purposes beyond detecting fraud.

A page concerning Mr. Howell, printed out from the “America’s Most Wanted” Web site, is taped to the wall of the investigators’ office here. It is a kind of trophy.

“It’s always exciting when you get a hit and you’re getting someone really bad off the streets,” said Maria Conlon, a facial-recognition specialist at the Registry of Motor Vehicles. “That’s when everyone’s morale goes up.”

Most of the work is less glamorous. The analysts’ main job is to check roughly 5,000 new driver’s license photographs every day against the database. A computer algorithm that takes into account about 8,000 facial data points does a rough cut, and analysts examine potential matches, rejecting the vast majority.

That computers alone cannot do the job does not surprise Richard M. Smith, an expert in digital security. “It’s probably one of the more inaccurate biometrics,” Mr. Smith said, referring to facial-recognition technologies.

After computers narrow the field of potential matches, Ms. Conlon and her colleagues get to work.

“We don’t look at hair,” Ms. Conlon said. “We do look at lips, noses, ears.”

Scars and tattoos can be useful, but what seem to be birthmarks are often passing blemishes. Some people make it easy by wearing the same clothes, though they are seeking licenses under different names. They have, Ms. Conlon said, “a registry outfit.”

The program, in place since April, has yielded more than 1,000 apparent fraud cases referred to the state police. Other potential matches identified by the computers and confirmed by analysts have turned out to be clerical errors where, for instance, the wrong information was attached to a person’s photograph. In the six months ending in January, analysts found 157 twins among the images flagged as potential matches.

The database’s second function, as a resource for law enforcement agencies, is growing in popularity. Police chiefs from around the state e-mail digital photographs for comparison with the database, sometimes several times a day.

And other uses are not hard to imagine. Coroners have on three occasions sent over photographs of dead people they could not identify. The analysts struck out, perhaps because of the quality of the images.

“To make it work at all,” Mr. Smith said, “you have to have good control of camera angle and lighting.” Passport and driver’s license photographs, along with mug shots, are ideal.

Other sorts of images are not useful — yet. “A video surveillance camera is probably not going to give it to you,” Mr. Smith said.

In time, though, the combination of facial recognition and other information — from financial records, mobile phones, automobile positioning devices and other sources — may do away with the ability to move anonymously through the world, Mr. Tien, the privacy advocate, said.

“The real question with biometrics,” he said, “is that they are part of a cluster of technologies that will allow for location tracking in both public and private places.”

The case against Mr. Howell fizzled last week. He had been charged with invading a home at gunpoint in Dorchester in August 2002 and holding three people captive for hours, repeatedly raping one of them. He fled after being released on bail, said Jake Wark, a spokesman for the district attorney’s office, leading to his inclusion on the television show’s most-wanted list.

But after Mr. Howell was caught through his license photo, the prosecutors re-examined their case. In the intervening years, the victims disappeared, and prosecutors think they may have left the country. Without their testimony, prosecutors concluded, there was no way to take the case to trial. Prosecutors formally abandoned the case on Friday, and they let Mr. Howell go.

“He is in the wind right now,” Mr. Wark said.
http://www.nytimes.com/2007/02/17/us/17face.html





Sweden

Film Industry Lobbyists Train Police on Internet Piracy

It is reported that Swedish police officers are being advised by a Hollywood lobby group how to catch people illegally downloading from the internet.

The newspaper, Computer Sweden, says that representatives from the Motion Picture Association and the FBI have been invited in to give lectures at Sweden’s National Police Academy.

The police do not see any conflict of interest in welcoming the lobby organisation but Sweden’s Pirate Party, which campaigns for copyrighted material to be free for everyone, says the MPA should not be able to get involved in this country’s justice system, ”just to protect their old, lucrative monopoly”.

Internet Piracy was a hot topic in Sweden last year, after Swedish Police closed down one of the world’s biggest bit torrent sites, The Pirate Bay.

It was alleged Washington had threatened to go to the World Trade Organisation to get sanctions imposed on Sweden if the site was not stopped. It was back up and running three days later.
http://www.sr.se/cgi-bin/Internation...rtikel=1210749





Can Sweden Sink Piracy?
Thomas Mennecke

Sweden has grown to become the focal point of online distribution. As the home country of The Pirate Bay, a BitTorrent tracker that has grown into something of a cultural phenomenon, it has gained a reputation that it may not be particularly fond of. With millions of dedicated users, The Pirate Bay remains a thorn in the side of the entertainment industry, which has been unable to successfully disrupt this massive operation.

That doesn't mean attempts to destroy The Pirate Bay's operation haven't been tried. Throughout its lengthy history, numerous legal threats, letters from the MPAA to the Swedish government, and most importantly, the temporary shutdown in May 2006, have all failed to permanently deter The Pirate Bay. If anything, the failure to pull the plug on The Pirate Bay has only emboldened their operation. Just last week, The Pirate Bay opened up "Oscartorrents", a BitTorrent website dedicated to Oscar nominated films. This has not gone unnoticed in the eyes of the entertainment industry.

The IFPI (International Federation of the Phonographic Industry) specifically names The Pirate Bay, among other distribution methods, in its 2007 "Special 301 Report." The report focuses squarely on Sweden as a “Safe Haven” for piracy, as the report states a lack of past effective copyright enforcement has helped fuel the current situation.

“Sweden also is the host country to ThePirateBay.org, the world’s largest BitTorrent tracker and one of Sweden’s largest web sites. The site has over 785,000 registered users, between 1.7 and 1.9 million peers, with 120,000 indexed torrents. Operators of the site proudly flaunt their role in facilitating infringements, often taking pot shots at rights holders from whom they receive notices of infringing activity. ThePirateBay was raided in mid-2006 by the Swedish police, and although the site is back up and running, it is expected that its prosecution will take place in the middle of 2007.”

The report paints a grim picture for copyright enforcement in Sweden. It consistently notes that despite international pressure, local police and prosecutors are reluctant to enforce intellectual property rights.

“The police take no ex officio action at all, even though they have the authority to do so. MPA reports that about 150 police reports have been filed against filesharers in Sweden, and of those, only eight have gone to trial so far - seven were convicted and one acquitted. These few notable exceptions of concrete action also resulted in public backlash.”

To get a handle on this increasingly dire situation, it appears the cavalry is being called in. Perhaps in preparation for a “middle of 2007” prosecution against The Pirate Bay, a new anti-piracy unit will finally be created in early 2007. According to the IFPI, the FBI, MPA and AntiPiratByran have taken on the task of training this new unit.

“The FBI, MPA, and AntiPiratByran (the umbrella organization for anti-piracy operations carried out on behalf of the film and games industries) participated in a training seminar for police on January 24, 2007. APB has continuously pressed for a special copyright unit to be created within law enforcement. This unit will be established in early 2007 and a special training will be provided on source piracy. The industries plan additional training and educational work with police officers and prosecutors in 2007.”

Considering The Pirate Bay’s geographical distribution, it may be tough to fully dismantle this organization. It seems they may be feeling the heat however, as they have recently been interested in buying Sealand and other offshore commodities. But is The Pirate Bay worried?

"Nope. We still haven't done anything illegal, no matter what the Americans think about us," Peter from The Pirate Bay told Slyck.com.
http://www.slyck.com/story1404.html





Attorney Proposes Licensing Music Distribution, Not Downloading

Everybody knows the music business is broken; the question is, "how it can be fixed?"

Bennett Lincoff, an "intellectual property law attorney, consultant and writer with more than 25 years of experience" that includes a spell as Director of Legal Affairs for New Media at ASCAP, emailed me his proposal for fixing the music business: altering copyright law so that the only right consumers would need to license from record labels is the right to distribute music.

Downloading or streaming it would be free; consumers and owners of networks would only need to secure licensing in order to redistribute a song. Suffice it to say, this would constitute a dramatic restructuring of the music business, but that's exactly what the digital age seems to require.

The paper is twenty eight pages long, so I asked Lincoff to summarize it for this blog. Here's Lincoff's summary of "Fixing What Is Badly Broken," in which he proposes ending DRM, allowing free listening, and putting all potential distributors of digital content on equal footing:

--------------------

"Recently, I published a Musical Licensing White Paper through my web site. In it, I propose an alternative to the music industry’s traditional sales-based revenue model for purposes of digital transmissions of sound recordings and of the musical works embodied in them. Mine is a comprehensive approach to rights licensing and rights management that does not depend on the efficacy of exclusionary DRM technologies for its success; a solution to the ongoing crisis of the digital music marketplace that simultaneously protects the integrity of copyright, promotes technological innovation, facilitates the growth of all manner of digital audio services, and meets consumer demand...

"To begin with, consumers would not incur any liability merely for surfing the web, accessing streaming media, or downloading music files. Copying for personal use also would not require authorization. To be sure, consumers still would be required to pay network operators for Internet access, and they may be required to pay audio service providers for their activities on particular web sites or services. But whether consumers listen to streams or download recordings; make one or many copies of a recording for personal use; or use recordings on one or several playback devices would have no effect on their obligation to music industry rights holders. None of this conduct would require consumers to obtain licenses or pay license fees under the digital transmission right; and should not otherwise.

"On the other hand, consumers would need licenses whenever they act as digital audio service providers in their own right; that is, whenever they are responsible for the digital transmissions at issue. By way of example, consumers would need authorization if they operate music-enabled personal or hobby web sites; or if they upload music files to a web site or service that does not have its own license under the digital transmission right authorizing this activity by users of its service (known as a 'through-to-the-user license'); or, if they offer recordings to others through participation in a P2P file-sharing network, or similar service, that does not have a through-to-the-user license.

"Under my proposal, through-to-the-user licenses would be made readily available on non-discriminatory terms to all sites and services wishing to obtain them. It stands to reason that consumers would seek out services that obtain licenses that authorize their activities (to the limited extent necessary under the digital transmission right) in connection with the web site or service in question. Individual users of sites and services that obtain through-to-the-user licenses would not need to obtain licenses in their own right. Moreover, licensed services, being lawful, would be able to operate openly, attract investment capital (without exposing investors to copyright infringement liability), and offer users the most sophisticated functionalities. And, there being no reason remaining for music industry rights holders to undermine them, licensed services would be free of many of the security and related privacy concerns that plague users of their black market counterparts.

"A similar analysis applies to the P2P file-sharing context. P2P participants who download music files through the network but do not offer works to others would not need a license under the digital transmission right. Individual P2P participants who configure their computers to enable transmissions of recordings to others through the network would need authorization. Operators of centralized P2P networks would be jointly and severally liable with their network participants who share recorded music with others on the network. For centralized P2P networks, a single license held by the network operator would authorize all transmissions of the licensed recordings through the network. In such circumstances, individual network participants would not need to obtain licenses themselves, and yet would be free to share the licensed recordings through the network whenever they wished.

"Decentralized P2P file-sharing networks, on the other hand, do not have network operators, as such, through whom a network-wide license could be made available. Accordingly, each participant in a decentralized P2P file-sharing network would be responsible for securing authorization for their own conduct on that network. Licenses for these individual file-sharers would also be made readily available.

"Again, it stands to reason that the vast majority of consumers who are interested in P2P would likely seek out networks that had secured licenses that authorize their file-sharing activities; especially if the file-sharing that is permitted actually offers consumers whatever it is that they want from the P2P experience at any given moment.

"To date, the music industry has steadfastly refused to authorize services – especially P2P file-sharing networks -- that offer consumers full, unfettered, DRM-free access to music. To be sure, the industry supports services that offer DRM-encumbered music files; files in obscure formats, such as MPQ; files that are tethered to particular playback devices; files that cannot be shared; files that time-out; are only available while the consumer remains a subscriber of the service from which the music was obtained; or that are subject to other use restrictions. These are, at best, alternatives to the services that consumers demand, not substitutes for them. Because these offerings fall short of responding to consumer demand, they leave the sales-based revenue model vulnerable to widespread infringement by consumers who refuse to accept less than they already know they can have.

"By its refusal to meet consumer demand, the industry has relegated consumers to unlicensed services where adware, spyware, and privacy violations abound. In turn, the industry uses technological measures in an effort to disrupt these services. It seeds them with corrupted music files that damage consumers’ computers. It also engages in a practice known as “spoofing” by which consumers – including, no doubt, some young children – who search P2P networks for music files have been sent pornography instead. And, of course, the industry has launched a campaign of infringement litigation against consumers seeking ruinous damages and imposition of criminal penalties for conduct occurring in the privacy of people’s homes.

"All of this would change under my proposal: Licensed transmissions of recorded music would be made available from the largest number and widest array of sources, anytime, anywhere, to anyone with network access; and consumers would be free to enjoy music when, where and how they themselves decide."
http://blog.wired.com/music/2007/02/...paper_pro.html





Legally licensed to show movies, TV shows

Former File-Sharing `Pirates' Now Forging Pacts With Studios
Elise Ackerman

It's the ending entertainment kingpins would have ordered Hollywood to produce if the industry's struggle with peer-to-peer piracy had been a scripted reality show: After years of ferocious legal battles and high-tech hijinx, the unsavory purveyors of illicit music, TV shows and movies come in from the cold, pledging to respect copyrights and to use their popular software to benefit the industry.

It's the ending the kingpins would have wanted -- and it's the ending they appear to be getting.

Next week, BitTorrent, the creator of software that made it possible to easily exchange full-length movies at virtually no cost, will launch a marketplace of licensed movies, television shows, video games and music. While details of pricing and available titles have yet to be unveiled, the San Francisco company says it has cut deals with 40 studios, production houses and game publishers.

The creators of Kazaa, a once-popular music-sharing program, are seeking similar licensing deals for Joost, a new European-based service that hopes to use its peer-to-peer network to legally distribute TV shows. Joost is currently available only for approved beta testers.

Peer Impact, of Sarasota Springs, N.Y., has deals with three major studios to offer legal downloads of TV shows like ``The Loop'' and ``Firefly,'' as well as movies like ``X-Men'' and ``Office Space,'' at prices ranging from 99 cents to $3.99.

Veoh Networks, a San Diego company partly backed by Time Warner, distributes episodes of shows like ``Beverly Hillbillies'' and ``Veronica Mars'' for free.

``Conceptually there is a place for peer-to-peer in the legal marketplace,'' said Mitch Bainwol, chief executive of the Recording Industry Association of America, an industry trade group. ``There is a ton of experimentation going on, not just here in the U.S. but all over the globe.''

``What the pirates showed us is that peer-to-peer is a great way to distribute content,'' said Dmitry Shapiro, who founded Veoh Networks in 2004 after first building a computer-security company called Akonix that prevented corporate networks from being used for illegal file sharing.

Shapiro isn't the only technologist to switch from fighting peer-to-peer to attempting to profit from the cost-saving efficiencies it offers. Robert Summer, ex-president of Sony Music International, is executive chairman of iMesh, a once renegade music-sharing service based in New York, which now uses audio filtering technology to screen out unlicensed content.

Ed Kozel heads Skyrider, a peer-to-peer advertising company based in Mountain View whose software was initially used by major studios to monitor and suppress copyrighted content being shared on peer-to-peer networks. Skyrider now tracks requests for files on the LimeWire peer-to-peer network and responds with advertising and/or licensed material.

``It was just a commercially larger opportunity,'' Kozel said.

Randy Ditzler, a partner from Sequoia Capital, which has invested in Skyrider, said the 420 million daily searches conducted on peer-to-peer networks around the world rivals the number of searches on either Google or Yahoo. Sequoia was an early investor in Google and YouTube.

According to research firm BigChampagne, about 100 million people use peer-to-peer services each month, as many as visit MySpace.

Thanks to the clever design of peer-to-peer networks, it costs next to nothing to reach this huge audience. While sites that stream video, like YouTube, pay hefty bandwidth fees to connect to their users, companies that use peer-to-peer distribution benefit from giant networks of personal computers that share the cost of moving data around the Internet.

This architecture has made peer-to-peer attractive to the giant corporations that own major studios and record companies. Still, it's unclear if companies like Time Warner can successfully co-opt giant peer-to-peer networks, which were built around the idea of sharing free content.

Copyrights have also been an obstacle. Allan Klepfisz, chief executive of Brilliant Technologies, which owns Qtrax, a peer-to-peer music service that is striving to go legit, said Qtrax will have to delay an anticipated launch into later in the year, as it continues to negotiate rights with both record labels and publishers who represent songwriters.

Legally distributing television shows on networks, such as peer-to-peer, is even more complex, as copyrights exist for individual performances, music and scripts. Shows themselves can have more than one owner.

So far, the video content available on both legal peer-to-peer services and conventional download services like Apple's iTunes is limited.

Finally, piracy of both music and videos continues to be a growing problem. According to the IFPI, an umbrella organization representing the international recording industry, an estimated 20 billion songs were illegally swapped or downloaded in 2005. That same year, the Motion Picture Association of America said its members lost $2.3 billion to Internet piracy worldwide.

``Illegal file sharing remains at unacceptably high levels that inhibit the development of the legal marketplace,'' said Bainwol of the RIAA.

Even as new legal peer-to-peer services launch, the prosecution of illegal file-sharing will continue. So far, the RIAA has taken about 18,000 people to court.

``Our work is not yet done,'' Bainwol said.
http://www.mercurynews.com/mld/mercurynews/16727733.htm





Malaysia Raids Illegal Software Sellers
Sean Yoong

Malaysian authorities have begun raiding computer retail outlets offering pirated software amid concerns that illegal copies of Microsoft Corp.'s newest operating system, Windows Vista, are already on sale.

The strategy marks a shift from crackdowns over the past year that mainly targeted companies using unlicensed software, Ahmad Dahuri Mahmud, the Domestic Trade Ministry's deputy director general of enforcement, said Friday.

"Computer dealers often sweeten computer purchases by offering consumers free (pirated) software pre-loaded onto their personal computers," Ahmad Dahuri told a news conference.

The current clampdown started Thursday with the arrest of a store owner in a Kuala Lumpur suburban shopping mall. Officials seized three computers with pirated versions of Windows XP from a 28-year-old suspect's premises, Ahmad Dahuri said.

The man is expected to be charged under copyright laws that provide for maximum prison sentences of five years and a fine of up to 20,000 ringgit ($5,700) per infringement.

Officials were also investigating claims by the public that some dealers have been loading pirated versions of beta copies _ unofficial versions released for tests _ of Windows Vista, Ahmad Dahuri said.

"We haven't found (pirated copies of) Windows Vista yet, but there have been complaints," Ahmad Dahuri said. "The government has no choice but to hit hard at the source as software piracy at the retail end has become rampant."

Windows Vista, Microsoft's long-delayed operating system upgrade, was released with much fanfare to consumers at the end of January.

Ahmad Dahuri did not say how many outlets were suspected to carrying illegal software, but stressed that "a high percentage" of computer retailers were believed to be involved.

"This is hurting the business of honest dealers," Ahmad Dahuri said.

Malaysian enforcement officers seized more than 28,000 copies of pirated software worth roughly 23 million ringgit ($6.6 million) in 2006, mainly from companies, factories and offices nationwide, Ahmad Dahuri said.

Some 60 percent of all software used in private businesses in Malaysia was illegal in 2005, the latest year for which figures are available, according to the Business Software Alliance, an anti-piracy watchdog. Malaysia's software industry lost $149 million to piracy that year.
http://www.washingtonpost.com/wp-dyn...021600213.html





In the World of Life-Saving Drugs, a Growing Epidemic of Deadly Fakes
Donald G. McNeil Jr.

Asia is seeing an “epidemic of counterfeits” of life-saving drugs, experts say, and the problem is spreading. Malaria medicines have been particularly hard hit; in a recent sampling in Southeast Asia, 53 percent of the antimalarials bought were fakes.

Bogus antibiotics, tuberculosis drugs, AIDS drugs and even meningitis vaccines have also been found.

Estimates of the deaths caused by fakes run from tens of thousands a year to 200,000 or more. The World Health Organization has estimated that a fifth of the one million annual deaths from malaria would be prevented if all medicines for it were genuine and taken properly.

“The impact on people’s lives behind these figures is devastating,” said Dr. Howard A. Zucker, the organization’s chief of health technology and pharmaceuticals.

Internationally, a prime target of counterfeiters now is artemisinin, the newest miracle cure for malaria, said Dr. Paul N. Newton of Oxford University’s Center for Tropical Medicine in Vientiane, Laos.

His team, which found that more than half the malaria drugs it bought in Southeast Asia were counterfeit, discovered 12 fakes being sold as artesunate pills made by Guilin Pharma of China.

A charity working in Myanmar bought 100,000 tablets and discovered that all were worthless.

“They’re not being produced in somebody’s kitchen,” Dr. Newton said. “They’re produced on an industrial scale.”

China is the source of most of the world’s fake drugs, experts say. In December, according to Xinhua, the state news agency, the former chief of China’s Food and Drug Administration and two of his top deputies were arrested on charges of taking bribes to approve drugs.

The director, Zheng Xiaoyu, was in office from the agency’s creation in 1998 until he was dismissed in 2005 after repeated scandals in which medicines and infant formula his agency had approved killed dozens of Chinese, including children.

“The problem is simply so massive that no amount of enforcement is going to stop it,” said David Fernyhough, a counterfeiting expert at the Hong Kong offices of Hill & Associates, a risk-management firm hired by Western companies to foil counterfeiters.

The distribution networks, he said, “mirror the old heroin networks,” flowing to Thai distributors with financing and money-laundering arranged in Hong Kong. The penalties are less severe than for heroin.

Daniel C. K. Chow, an Ohio State University law professor and an expert on Chinese counterfeiting, said he believed that the authorities would pursue counterfeiters “ruthlessly” for killing Chinese citizens but be more lax about drugs for export.

“The counterfeiters aren’t stupid,” he said. “They don’t want anyone beating down the door in the middle of the night and dragging them away, so they make drugs for sale outside the country.”

A spokesman for the Chinese Embassy in Washington said that he had “no idea” whether most of the world’s counterfeits came from China, but that Mr. Zheng’s arrest proved China was cracking down. He also said counterfeiters would get the same punishment no matter whom they hurt.

Many of the fake artesunate pills found by Dr. Newton’s team were startlingly accurate in appearance — and much more devious in effect than investigators had suspected.

Not only did the pills look correct, as did the cardboard boxes, the blister packing and the foil backing, but investigators found 12 versions of the tiny hologram added to prevent forgery.

In one case, even a secret “X-52” logo visible only under ultraviolet light was present, though in the wrong spot.

Another hologram was forged by hand, Dr. Newton said, by someone who obviously spent hours with a pin and a magnifying glass making tiny dots on a circle of foil to imitate the shimmer.

But the most frightening aspect appeared when the pills were tested. Some contained harmless chalk, starch or flour. But the latest, he said, contained drugs apparently chosen to fool patients into thinking the pills were working.

Some had acetaminophen, which can temporarily lower malarial fevers but does not kill parasites. Some had chloroquine, an old and now nearly useless antimalarial.

One had a sulfa drug that in allergic people could cause a fatal rash.

And some had a little real artemisinin — not enough to cure, but enough to produce a false positive on the common Fast Red dye test for the genuine article.

Those would not merely fool a laboratory, Dr. Newton noted. They could also foster drug-resistant parasites, so if patients were lucky enough to get genuine artemisinin treatment later, they might have already developed an incurable strain and could die anyway.

Such resistant strains could spread from person to person by mosquito and ultimately render the drug ineffective, as already happened with chloroquine and Fansidar, two earlier malaria cures.

“We make no apology for the use of the term ‘manslaughter’ to describe this criminal lethal trade,” Dr. Newton and his co-authors said last year in an article in The Public Library of Science Medicine. “Indeed, some might call it murder.”

In the United States, finding counterfeit drugs in pharmacies is very rare, “but we’ve seen a lot from Internet sellers posing as legitimate pharmacies,” said Dr. Ilisa Bernstein, director of pharmacy affairs for the Food and Drug Administration.

Thus far, few counterfeits of life-saving drugs have been found in the United States. Most are drugs used or abused for fun, like Viagra, the painkiller Oxycontin and sleeping pills. Investigators have, however, found fake statins, which could eventually lead to a heart attack, and fake Tamiflu, which could be fatal in a pandemic of lethal flu.

Fake drugs have a long history; the film noir masterpiece “The Third Man,” based on a real criminal case, involves adulterated penicillin in post-war Vienna.

And in the 1600s, after conquistadors discovered that South American cinchona bark cured malaria, Europe was flooded with fake bark. “It caused a great loss of confidence in it as a cure,” Dr. Newton said. “We’re seeing history repeat itself.”

The problem with antimalarials is worst in Asia, but is growing rapidly in Africa.

For example, in September, Nigerian authorities found $25,000 worth of counterfeit malaria and blood pressure drugs concealed in a shipment of purses from China.

The temptation for counterfeiters is likely to grow because money to fight malaria is being poured into the third world.

President Bush’s $1.2 billion Malaria Initiative avoids the problem by buying directly from Western pharmaceutical companies like Novartis, said Dr. Trenton K. Ruebush II, an adviser to the initiative.

By contrast, the Global Fund to Fight AIDS, Tuberculosis and Malaria gives money directly to poor countries to buy their own drugs, and sends auditors to follow up. But 80 percent of the world’s nations, pharmacology experts estimate, lack drug agencies capable of detecting sophisticated counterfeits.

“The countries are supposed to purchase from W.H.O.-qualified manufacturers, but there are places where things can go wrong where we wouldn’t necessarily have control,” said Dr. Bernard Nahlen, the fund’s malariologist. “In some countries, there is, let’s say, a certain lethargy about paying attention to these issues. You have to take the government’s word for it, and anybody can pull the wool over anybody’s eyes.”

The Global Fund, which appointed a new director on Feb. 8, is considering adopting central purchasing, a spokesman said.

A global alert system for counterfeit drugs has existed for 16 years, first by fax, and now on the World Health Organization Web site, said Dr. Valerio Reggi, chief of the anticounterfeiting task force created last year by the organization.

“But it isn’t used very much,” he said. “Regulators are human beings, and it’s difficult to identify a benefit for those who report to it.”

Dr. Reggi said the task force would try to change that by drawing attention to the problem and getting harsher laws passed. As he pointed out, in many countries, “counterfeiting a T-shirt means 10 years in jail, but counterfeiting a medicine can be a misdemeanor.”
http://www.nytimes.com/2007/02/20/sc...coun.html?8dpc





A Pianist’s Recordings Draw Praise, but Were They All Hers?
Alan Riding

In the autumn of her life, decades after she had last performed in public, the British pianist Joyce Hatto was rediscovered by a small group of musicians and critics who contended that her recordings of Chopin, Rachmaninoff, Liszt and others ranked alongside those of the 20th century’s most exceptional virtuosos.

When she died last June at 77, some of those same enthusiasts again proclaimed her to be a neglected genius, in glowing obituaries written for British newspapers. In The Guardian, the music critic Jeremy Nicholas described her as “one of the greatest pianists Britain has ever produced.”

Mr. Nicholas and others, it seems, had accepted the explanation for her lack of renown among music lovers: a long battle against cancer had forced her to abandon her concert career in 1976 and led her to devote her energy to recording all the great works in the piano repertory, from Scarlatti to Messiaen, for the small British label Concert Artist.

“Joyce Hatto must be the greatest living pianist that almost no one has ever heard of,” Richard Dyer wrote in The Boston Globe in 2005.

But now Ms. Hatto’s reputation for excellence and originality has been shaken by a charge of plagiarism. Gramophone, the London music monthly, has presented evidence that several of the recordings issued under her name were in fact copied from recordings of the same music by other pianists.

“We’re only just starting our investigation,” Gramophone’s editor, James Inverne, said in a telephone interview from London on Friday. “Already since we broke the story, people are coming forward expressing doubts about other recordings by Joyce Hatto.”

In an article posted on the magazine’s Web site (www.gramophone.co.uk), Mr. Inverne said initial doubts about Ms. Hatto’s recordings had been confirmed by a sound engineer, Andrew Rose, who compared the sound waves of her recording of Liszt’s 12 “Transcendental Études” with those of an earlier version by Lazlo Simon. In 10 of the études, the sound waves were identical.

Mr. Rose, who runs Pristine Classical, a small company based near St. Émilion in southwest France, has since created a Web page (pristineclassical.com/HattoHoax.html) where Liszt recordings by Ms. Hatto can be heard alongside those by Mr. Simon and one by the Japanese pianist Minoru Nojima. Mr. Rose has also concluded that Ms. Hatto’s supposed recording of Godowsky’s studies after Chopin études was in fact the work of Carlo Grante.

The findings have stunned admirers of Ms. Hatto, who in just the last two years have promoted what began to resemble a cult.

In a telephone interview on Friday, Mr. Nicholas defended his earlier impression that the CDs credited to Ms. Hatto were “the most extraordinary recordings I have ever heard.”

He added: “You never ask yourself: ‘Did this person ever go into a studio? Was I being conned?’ She was, after all, someone who had a concert career.”

Mr. Nicholas said that Ms. Hatto performed in Wigmore Hall in London in the 1960s and made a few records before her retirement from the stage. “I am one of the few people in the music world who actually met her,” he recalled. “But no, I never heard her play.”

William Barrington-Coupe, Ms. Hatto’s husband and the owner of Concert Artist, which issued more than 100 of her recordings (available online at concertartistrecordings.com), is perhaps the only person who can clear up the mystery. But he could not be reached at his home near Cambridge on Friday and did not respond to telephone or e-mail messages.

Mr. Inverne said that he had spoken to Mr. Barrington-Coupe by telephone on Thursday. “He was very charming,” Mr. Inverne said. “He sounded utterly puzzled. He said he could not explain it and asked to be informed if anyone shed any light on the affair.”

As it happens, questions about the authenticity of Ms. Hatto’s recordings had for some time been aired in Web chat by music lovers who asked how it was possible for an aged and ailing woman to record so much. They also pointed out that most of Ms. Hatto’s more than 100 CDs were issued over the last 10 years and a number since her death.

These doubts prompted Mr. Nicholas to write a letter to Gramophone last July asking for evidence of possible fraud. “No one came forth,” he said.

Then, this month, Jed Distler, a composer and music critic who was among Ms. Hatto’s admirers, contacted Mr. Inverne with a strange story. When he put the Hatto CD of the Liszt études into his computer, Mr. Inverne recounted, “his iTunes player identified the disc as, yes, the Liszts, but not a Hatto recording.” Instead, it identified Mr. Simon as the performer.

Looking for scientific evidence of a hoax, Mr. Inverne then sent the Hatto and Simon recordings to Mr. Rose, a former sound engineer for the BBC. Mr. Rose said that the Liszt recordings were easy to identify as those made by Mr. Simon, but that the Nojima recording had been “manipulated” to disguise its origin.

“If all this is true,” Mr. Inverne said, “what strikes me is that this sort of piracy was made possible by technology, and later advances in technology uncovered it.”

He added: “As far as I know, the classical music world has never known a scandal like this. The art world has, but not classical music.”
http://www.nytimes.com/2007/02/17/ar...ic/17hatt.html





For Some Unmellowed Metalheads, Middle Age Is Nothing to Fear
Ben Ratliff

Who would have thought, back in the ’80s, that the clatter of Slayer’s rhythm section would someday become one of those archaic folk forms worth preserving just as an example of human mastery, like Kansas City swing or flamenco singing?

Rhythm sections, in many kinds of metal, have gone funkier, toward deeper grooves. But Slayer’s hasn’t. Its drummer, Dave Lombardo, still plays the same way he did in the early ’80s, in wickedly fast two-beat rhythms that constantly rush the music and do not swing; the only difference now is that his sound is bigger and surer, his fills more impressive.

It’s a completely unreasonable music, set at crazy speeds for the endless riffs and strangulated, whammy-bar-heavy solos. The band’s lyrics show an equal intemperance: “Christ Illusion,” its last album, full of holy-war imagery, comes out more vehemently against organized religion — one of the band’s favorite topics — than most of its records have in the past. Mellowing is not on the band’s docket.

Yet Slayer’s show at Hammerstein Ballroom on Thursday night created its own sense of comfort and refinement; it was self-contained, expertly paced, an awesome display of self-knowledge. People do get better at many things in their 40s. The odds were against thrash-metal being one.

Slayer doesn’t do much onstage: no pyrotechnics, no leaping, very little ingratiating stage rap. Tom Araya, its singer and bassist, still puts his head down and whips his tresses around clockwise when he’s not singing. The two guitarists, Kerry King and Jeff Hanneman, trade off solos, sometimes positioning themselves next to each other. That’s about it.

The group just won its first Grammy, for the song “Eyes of the Insane.” In part:

These thoughts of mutilated faces

Completely possessed

Fragmented images

Flashing rapidly

Psychotically abusing me

Worming through my head

Did Mr. Araya say: “Hey, man, we just won a Grammy! How about that, New York?” No. He blazed right through it, on the way to the old song “Mandatory Suicide,” which he dedicated to the American troops in Iraq. (It’s a rendering of war as mad slaughter, but like most Slayer songs, it resists being politically lined up; it keeps reaching for the epic poet’s point of view.)

The mini-epic “Seasons in the Abyss,” with its ringing tritone interval at the beginning, its extended solos, its medium tempo, was as close as Slayer got to a groove. Otherwise, this was a set pulled into 90 minutes, with hard-core-punk tempos, arranged blasts of feedback linking songs, and ending abruptly with “Angel of Death.” The band members did not return. It is logical that they don’t believe in encores, either.
http://www.nytimes.com/2007/02/17/ar.../17slayer.html





YouTube out, "piracy-proof" Joost in

Viacom Inks Deal With Video-Sharing Outfit
AP

Media conglomerate Viacom Inc. agreed Tuesday to license television shows and movies to Joost, the new online video distribution channel launched by the founders of Kazaa and Skype.

Under the deal, Viacom's MTV, Nickelodeon and BET television networks and its Paramount studios will license shows and movies for the Joost Internet platform. This comes two weeks after Viacom pulled Comedy Central clips and other content from Google Inc.'s YouTube online video sharing service, citing copyright concerns.

Joost, founded by Niklas Zennstrom and Janus Friis, is still in testing. The service will allow free access to programs and channels in broadcast quality, supported by ads.

The Viacom arrangement marks the first big licensing deal for Joost, which promises to be a "piracy-proof" distributor of regular episodic content rather than the individual clips that tend to make up YouTube uploads. Much like Skype and Kazaa, which enraged the music industry because it enabled free trading of content, Joost uses peer-to-peer technologies to distribute material. Joost also uses encryption and other methods to lock content down.

Viacom said some of the shows it will license include MTV's "Real World" and "Beavis & Butthead," and Comedy Central's "Freak Show and Stella." Viacom CEO Philippe Dauman said Joost was chosen for its interactive user experience and its "business model that respects both content creators and consumers."
http://www.cbsnews.com/stories/2007/...n2495240.shtml





Sharing the Wealth at MTV
Dan Mitchell

A WEEK before Viacom announced that it would make video content available online through a site called Joost, the Viacom-owned MTV Networks said that it would soon allow other Web sites to embed video clips from its own sites: MTV.com, VH1.com, Comedycentral.com, BET.com and others.

“We need to open up our Web sites and content both for consumers and for other companies,” Mika Salmi, MTV Networks’ president of global digital media, told Reuters, which said the move was “part of a strategy to bring Viacom’s Web sites up to ‘Web 2.0’ standards.”

If so, it is a new strategy. For most of its history, the MTV sites have been anything but open. Until recently, clips from Comedy Central were available only to those using the Internet Explorer browser, and Macintosh users who wanted to watch a video on VH1’s VSpot broadband service were out of luck. And even now, trying to find a clip from, say, “The Daily Show” often requires an infuriating amount of searching and drilling down through several clicks. And forget about sending your friend a link directly to the video — it cannot be done.

Still, the sites have improved. And GigaOM’s Om Malik praised the MTV Networks decision to let users embed videos, writing this week that it served as evidence that the people at Viacom “seem to be correcting themselves on many fronts” (gigaom.com). And it could make up for much of the promotional boost Viacom lost when it pulled its content from YouTube, the video-sharing site owned by Google.

The Joost deal may improve things, depending largely on how user-friendly the site is. Unlike YouTube, Joost will feature clips and entire episodes, complete with commercials. And it does not allow users to upload videos. It is just TV on the Internet, so there are no depictions of teenagers re-enacting their favorite 50 Cent videos.

Viacom’s decision to drop YouTube and hook up with Joost has drawn vitriol from the “big media must be toppled” crowd. Viacom will be sorry, wrote Stan Schroeder on his blog at Frantic Industries, because “big media companies are not giving the people what they want.”

“They’re giving them what they, the companies, think they should have.”

Of course, Viacom’s problem with YouTube arose because so many people want precisely what big media gives them: “The Daily Show,” “South Park,” music videos, “American Gangster.” As ever, the sticking point was money.

Some are saying that Viacom may yet come to terms with YouTube, and the Joost deal may be, at least in part, a negotiating tactic. It will, writes “Mike” on TechDirt, allow Viacom to “go back to the folks at Google/YouTube and say “look, Joost is willing to pay us money!” in the hopes that it will convince YouTube to pay out as well.”

Hot-Dog Defiance It seems only fitting: The first Chicago institution to be cited for circumventing the city’s new ban on foie gras is a Northwest Side hot-dog joint.

But Hot Doug’s isn’t quite the standard under-the-el-tracks Chicago doggery (hotdougs.com). The dish that got the owner, Doug Sohn, busted was a “Foie Gras and Sauternes Duck Sausage With Truffle Sauce Moutarde and Armagnac-Truffle Chicken Mousse,” according to The Chicago Sun-Times. The price was $6.50. The Health Department hit Mr. Sohn with a $250 fine.

“People are actually dying from the cold, and I’m getting hassled because of some sausage,” he told The Sun-Times on a day when the temperature hovered around zero. Mr. Sohn, who calls Hot Doug’s an “encased-meat emporium,” is an outspoken opponent of the ordinance.

Those Pesky Allergies Jessica Simpson, a spokeswoman for Pizza Hut, has said that she is allergic to cheese, tomatoes and wheat, according to an article in Elle magazine. “You know,” writes Meghann Marco of The Consumerist, “it’s not that we require that every celebrity constantly use the product they’re shilling for, but we’d like to think that the spokesperson is able to eat the food without getting sick”.
http://www.nytimes.com/2007/02/24/te.../24online.html





YouTube Justice

Doreen Carvajal writes:

I’m just back from covering the start of the trial of 29 people accused in the 2004 Madrid train bombings. Most of the time, I was jostling for space for my laptop in a cramped press room adjoining the main courtroom. With more than 150 people with precious press credentials, there wasn’t enough room for all of us in the courtroom crowded with more than 40 lawyers and families of the 191 victims.

The adjoining press room was equipped with giant plasma television screens and wireless connections, but I found it extremely difficult to concentrate with journalists hushing others who were chatting during testimony. When I left late in the day to file again from my hotel, I was delighted to make the discovery of streaming live coverage of the trial.

The days when everyone could stroll over to the courthouse and witness a historic event - a la “To Kill a Mocking Bird” - are long over. But for the first time, I felt that an international event could be local again with instant access to the inner sanctum of Spanish justice.


Thomas Crampton responds

Yes, the definition of local has changed considerably. Local formerly meant something that occurred physically nearby, but with the death of distance brought by the Internet, passionate interest becomes more important than physical proximity.

Those passionately interested in the Madrid trial - from around the world - can now be brought into the event like never before.

I wonder how this new access could change the trial?
http://blogs.iht.com/tribtalk/techno...etamedia/?p=49





Social Networking Meets IPTV
Fred O'Connor

A new application from Raketu Communications aims to integrate IPTV (Internet Protocol television) with social networking, two of the Internet's hip technologies.

Raketu.tv, which became available in beta mode on Tuesday, delivers IPTV and video on demand (VOD) programming. The social-networking component factors in when using the IPTV or VOD services with Raketu's other communication and entertainment application, which shares the company's name. Raketu, which debuted last September, aims to integrate separate communication and entertainment programs that should be combined into one client, said Raketu CEO Greg Parker. It includes VOIP (voice over IP), instant messaging and file-sharing.

While simultaneously using other applications and Web sites accomplishes the same tasks as Raketu, Parker said that his software eases communicating and information gathering by combining several services into one program. Users no longer have to use multiple programs and Web sites to accomplish the same task that one application provides, said Parker.

For example, friends could use Raketu to watch a video on surfing while discussing it via VOIP or instant messaging. The friends could then use a travel search feature in Raketu that locates airfares in an effort to plan a surfing vacation.

"We're a bit of YouTube, a bit of MySpace, a bit of Joost, a bit of different social-networking technologies," said Parker. "We feel that we do a better job of integrating these services."

Parker also noted that Raketu differs from other P-to-P (peer-to-peer) services, like Skype and Joost, by not using super nodes, which link multiple computers together to transfer data.

"This means you don't use your bandwidth to help other people get content, which means users get a more secure and faster service," said Parker.

Media Global Intertainment will provide the IPTV content. As of Tuesday, the service offered five stations, including Cartoon TV and BBC Parliament. VOD content will come from Klikvu.com, which offers shows in categories such as extreme wrestling, soccer and sports. VOD selections offered four categories as of Tuesday, including action sports and documentary.

The VOD offerings are pay-per-view, which is how the media service will generate revenue, according to Parker.

Social networking, which permits users to find friends and create and manipulate online content, has increased in popularity with the advent of Web sites such as MySpace.com, which News Corp. purchased for $580 million in 2005, and Google's YouTube video-sharing site.

While Internet video is seen as playing a major role in the Web's development, the availability of content is crucial to this service. YouTube has been sorting out charges of copyright violations from entertainment companies whose content users illegally uploaded to the site. Meanwhile, Joost, an IPTV company launched by Skype Ltd.'s founders, announced Tuesday that it entered a deal with Viacom International to offer its television shows and feature films.
http://www.digitmag.co.uk/news/index.cfm?NewsID=7314





EMI Confirms Warner Music Takeover Offer
Jane Wardell

Struggling music company EMI Group PLC -- scarred by two profit warnings in as many months and a recent accounting scandal in Brazil -- was thrown a potential lifeline Tuesday in the form of a possible new takeover bid by former suitor Warner Music Group.

A tie-up would bring major U.S. selling artists including Madonna and the Red Hot Chili Peppers to London-based EMI, whose Beatles remix album has dropped out of the Billboard top 40 and whose great hope for cross-Atlantic appeal, Robbie Williams, has received more publicity for entering rehab than for his music.

"A deal would be a no-brainer," said Hargreaves Lansdown Stockbrokers analyst Richard Hunter, citing around 350 million pounds (US$680 million; euro520 million) in initial cost savings and synergies.

Shares in EMI, whose book includes Norah Jones, Coldplay, Kylie Minogue and the Beatles back catalog, rose 8.4 percent to close at 240 pence (US$4.69; euro3.57) on the London Stock Exchange -- despite concerns from some analysts about the regulatory outlook and business appeal for a potential deal.

EMI and Warner each made approaches worth around US$4.6 billion (euro3.5 billion) to the other last year, but abandoned the attempts when a European Court ruling scuppered another big merger between the music units of Sony Corp. and Bertelsmann AG.

Several analysts said the announcement Tuesday that New York-based Warner had made a fresh approach, without a formal proposal, suggested that the industry believes that the EU will clear the Sony BMG merger in a ruling expected by March 1.

Warner said it had the support of Impala, the trade association which represents independent music labels and licensing companies, for the acquisition. Impala has been vocal in opposing previous record company mergers and is considered a key influence on European Union antitrust authorities' historically tough stance on sector deals.

But some analysts remained skeptical.

"The key issue within any corporate activity remains regulatory risk, following the European Court's decision to annul the authorization of the Sony BMG merger," said Iain Daly at Bridgewell Securities. "There is little clarity on this point and we continue to believe that this makes an EMI/Warner combination difficult to put together."

A merged EMI and Warner Music would control about 25 percent of the global recorded music market based on sales, ranking second to Vivendi SA's Universal Music, according the International Federation of the Phonographic Industry.

Music companies have been looking to consolidate as the market for physical CDs declines rapidly. The IFPI estimates that overall music sales fell around 3 percent in 2006 as a doubling in digital sales failed to compensate for falls in physical CD sales and digital piracy.

EMI has blamed the overall industry decline for its own troubles, citing disappointing North American CD sales last week when it announced its second profits warning this year. But analysts say that the overall industry's woes do not entirely explain EMI's poor performance, pointing out that Warner and Universal have weathered the storm better.

They instead highlight EMI's persistent weakness in the United States, lack of promising new tunes and internal control problems.

The company announced the departure of two top executives in January when it issued its first profit warning this year. It also unveiled a raft of cost-cutting measures as it said that Music Chief Executive Alain Levy -- who was recruited five years ago to turn around the fortunes of the ailing music company -- and Vice Chairman David Munns were leaving immediately.

The two profit warnings followed revelations last year of accounting fraud at EMI's Brazilian recorded music division, which resulted in the company's EMI Music arm overstating profits by around 9 million pounds (US$17 million; euro13.5 million) and revenues by around 12 million pounds (US$22.5 million; euro18 million). The company suspended several senior Brazilian managers over the scandal.

Analysts said the other major problem is that EMI only captures 10 percent of the U.S. music market, the most lucrative in the world.

The company did have a U.S. No. 1 last month when it released Norah Jones' acclaimed new album, and British singer Lily Allen is also tipped for American success.

EMI could also be in for a windfall from its Beatles catalog if it agrees to online sales of Fab Four's songs. Analysts expect an announcement on a digital catalog sometime soon after iPod maker Apple Inc. recently resolved a bitter trademark dispute with The Beatles' guardian Apple Corps Ltd. over use of the apple logo and name.

In the meantime, with superstars Coldplay unlikely to release a new album before the end of the year, analysts say that EMI simply does not have enough good talent on its books.

Lorna Tilbian, an analyst at Numis Securities, said that Warner may be seeking to take advantage of the recent drop in EMI's share price, after the British company terminated discussions with an unidentified suitor -- widely believed to be European private equity firm Permira Advisors Ltd. -- in December.

However, Collins Stewart analyst Simon Wallis said the benefits of a merger were difficult to calculate because "both businesses are suffering a structural decline."

Warner, while performing better than EMI, has its own problems, reporting earlier this month that first-quarter profit fell 74 percent due to fewer albums released during the period and soft domestic and European sales.

"While EMI management are highly vulnerable to a bid, we think that the risk-reward on these shares is unattractive and that today would be an excellent day to sell," Wallis said.
http://www.businessweek.com/ap/finan.../D8NDIMKO1.htm





EMI/Warner - The Background
Katie Allen

EMI has its roots in the 1897-founded Gramophone Company, which counted Enrico Caruso among its early artists. As the 1930s Great Depression hit the recording industry the Gramophone Company and Columbia Graphophone Company merged to create Electric and Musical Industries, or EMI.

By the mid-20th century EMI had ramped up its roster of artists to include Frank Sinatra and Shirley Bassey. With music industry consolidation back on the agenda at the start of this century, EMI and US rival Warner first attempted to combine in 2000. Those efforts were abandoned, however, because of competition issues.

Soon after EMI said discussions with BMG, the music arm of German media group Bertelsmann, had also ended due to regulatory fears. In 2003 EMI was reportedly in talks with US private equity group Blackstone and towards the end of that year it lost out in the auction of AOL Time Warner's music business, which went to former Hollywood mogul Edgar Bronfman Jr - current head of Warner.

Last summer EMI bid for Warner and Warner counterbid for EMI. Private equity joined the fray later in the year, but EMI rejected Permira's £2.5bn approach. This year started with an EMI profits warning and the departure of music boss Alain Levy. Last week EMI came out with another profits warning and news of Warner's latest approach came soon after that.
http://business.guardian.co.uk/story/0,,2017437,00.html





The XM-Sirius Deal May Not Fly

The combination needs approval from the FCC. But the commission's chairman is skeptical—and the regulatory body has rejected similar deals
Phil Mintz

The long dance that led XM Satellite Radio and Sirius Satellite Radio to agree to what's being termed a $13 billion "merger of equals" announced Feb. 19 may have been the easy part. Now the two companies need the Federal Communications Commission to go along. And that might very well be even tougher than reaching an agreement on how to combine the two long-standing rivals.

The long-rumored deal, unveiled on President's Day, looks a lot like an acquisition of XM by Sirius, despite the "merger of equals" language. XM shareholders will receive 4.6 shares of Sirius stock for each share they own and will get a premium of roughly 22% above the Feb. 16 closing price. Mel Karmazin, Sirius' chief executive, will take the CEO post at the combined company, while Hugh Panero, XM's chief executive, will not have an executive role. Gary Parsons, XM's chairman, will continue in that position at the combined companies.

"This combination is the next logical step in the evolution of audio entertainment," said Karmazin, in the merger announcement. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies.

The two companies also said in their announcement Monday that the transaction is subject to "regulatory review and approvals, including antitrust agencies and the FCC." But it doesn't explain how the merger, which the companies said they hope to close by yearend, is going to pass regulatory muster.
Precedent for Rejection

On Jan. 17, FCC Chairman Kevin Martin told reporters that XM and Sirius' satellite radio licenses would preclude a merger. Shares of XM (XMSR) dropped 10%, and shares of Sirius (SIRI) dropped 7% that day. In a statement late Monday Martin said the companies would have to clear a high hurdle in making their case for the merger. "The companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices," Martin said.

Industry observers note that the FCC has the leeway to change the rules or permit an exception, particularly if it concludes that satellite radio is just part of a larger constellation of providers, including traditional broadcast radio and the Internet. However, if you're looking for a precedent, you need go back no further than 2002, when the FCC rejected a merger between satellite TV companies EchoStar Communications (DISH) and DirecTV Group (DTV) on the grounds that it would have created a monopoly in rural areas. As the XM-Sirius merger gained steam last week, several investment analysts said that FCC approval was possible but not assured (see BusinessWeek.com, 2/16/07, "Analyst to XM, Sirius: Quit Quibbling").
Industry Criticism

Industry competitors are certainly going to put pressure on to block the merger. Within hours of the merger announcement, the National Association of Broadcasters, which represents broadcast stations, labeled it "anti-consumer" and called on the FCC to block it. The broadcasters took a swipe at an argument that proponents of the merger would be expected to use, that the two services are not profitable and are being hurt by competition.

"When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems," the NAB said a statement. "Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bail-out to avoid competing in the marketplace."

The FCC issue is just one of the questions that are going to face Karmazin and Parsons. But it may be the one with strongest likelihood of stopping the merger in its tracks.
http://www.businessweek.com/bwdaily/...220_325862.htm





Satellite Radio: A Good Idea, but a Bad Investment
Floyd Norris

It is the genius — or perhaps the great flaw — of the American capital system that really clever, but totally uneconomical, ideas can be financed by investors.

That process creates enterprises that may eventually be valuable, even if not to those who put in the original money.

So it was with satellite radio, a onetime Wall Street darling that is again the subject of investor enthusiasm after the announcement of plans to merge the only two players in the American market: XM and Sirius.

Perhaps satellite radio will finally work out as an investment now. The hope is that the two companies can use the threat of financial failure to obtain regulatory approval for creation of a satellite radio monopoly.

That may be tricky, given that to secure their licenses from the Federal Communications Commission in the first place they promised never to try to merge with each other.

But it is hard to see what else will allow these companies to ever become profitable — particularly given the eventual threat of good mobile Internet service, which could give drivers access to Internet radio without having to pay hefty subscription fees.

A combined company could pay less for content, ending those bidding wars for sports events and celebrities like Howard Stern (now on Sirius) and Bob Dylan (now on XM). And it might be able to charge more as well, offering varying packages. There are many customers who love satellite radio and the choices it provides.

Whatever the future, however, the past is clear. These companies were financed in large part based on enthusiasm and belief in what turned out to be totally unrealistic expectations. A good product was created, but a lot of money was wasted in the process.

Public investors were losers, but some of the worst investments were made by auto companies, notably Ford Motor and DaimlerChrysler.

An examination of Sirius’s history shows the sad reality. From the time it went public in 1994 until early 2002, when it signed up its first customers, it raised $499 million in public offerings of common stock, and much more from selling bonds and preferred stock. The average offering price was $15.05. Those shares are now under $4.

It is sometimes easier to sell securities when there are no operations. After all, a company with no revenue cannot come in below forecasts.

Wall Street was optimistic. In the fall of 1999, just as Sirius sold stock at $24.75, with Merrill Lynch as lead underwriter, a Merrill analyst forecast Sirius would earn $13.50 a share in 2007.

Ford was a buyer in that offering, putting down $20 million.

The next year, with the price up to $55, an analyst at Salomon Smith Barney estimated that by 2005 the two services would split $342 million in advertising revenue. The actual figure turned out to be $26 million.

In 2000 DaimlerChrysler invested $100 million, paying $43.66 a share. It was the highest price Sirius ever got for selling stock.

By the time Sirius started broadcasting in 2002, it was in trouble. Within months it proposed a reorganization that ended with most of the company owned by creditors and new shares being sold for 94 cents each to institutional investors.

Some of those investors have done very well. Funds that are part of Apollo Management, controlled by Leon Black, managed to sell 40 million shares to public investors for $7.12 each in 2005.

Since the reorganization, Sirius has brought in Mel Karmazin, the former president of Viacom, as its chief executive, and he spent a lot of money on talent, notably Mr. Stern.

If the merger goes through, Mr. Karmazin will run the combined company. But it is fair to say he has not yet done much for Sirius shareholders, including himself. The stock is below where it was when he was hired and given 3 million shares and options to buy 30 million more at $4.72. It is also below the prices he paid for another 3.5 million shares, which ranged from $4.47 to $6.21.

Personally, I am glad all this happened. A rational market might never have financed satellite radio, and I would not be able to hear the music I like on XM, as I do now in my car and at home.

But I might feel differently if I had been one of those who believed the rosy financial forecasts.
http://select.nytimes.com/2007/02/23.../23norris.html





The World of Black Theater Becomes Ever Bigger
Campbell Robertson

Urban theater — or what has been called over the years inspirational theater, black Broadway, gospel theater and the chitlin circuit — has been thriving for decades, selling out some of the biggest theaters across the country and grossing millions of dollars a year.

In the last two years, however, the tenor of the business has changed, especially since Tyler Perry, the circuit’s reigning impresario, took in $110 million at the Hollywood box office with “Diary of a Mad Black Woman” and “Madea’s Family Reunion,” movies that were based on his plays; they cost less than $7 million each to make.

The bigger players are developing television series, and veterans who have been part of the circuit for years suddenly have movie deals. The word in the industry is that urban theater is about to go mainstream.

“A year and a half from now, if you’re not coming with a play, film script and sitcom spinoff, you’re not going to be able to go anywhere in this business,” said Gary Guidry, one of the founders of I’m Ready Productions, based in Houston, another of the circuit’s big producers.

But the sight of crowds of theatergoers slowly streaming into the Lyric Opera House here on Saturday and Sunday, continuing to walk through the door throughout the first act and eventually filling just about every one of the 2,564 seats for a performance of “Men, Money and Gold Diggers,” prompts the question: If this is not already mainstream, what is?

As white theatergoers were lining up for “Wicked” at the France-Merrick Performing Arts Center across town, the audience filling up the Lyric, a slightly larger theater, was almost exclusively black, mostly middle-aged women. Many said they had heard about the play through the traditional lines of the circuit’s promotion: radio ads, fliers in local business and church parking lots and an astonishingly effective word-of-mouth network that precedes the show from city to city.

Some aspects of urban theater are set in stone. Top tickets average about $30 less than those of touring Broadway shows. And it has become standard practice to sell DVDs of the plays after the tour; Mr. Perry has reportedly sold more than 11 million.

The plays, which typically take place in contemporary settings, are often sprinkled with R&B solos and duets, and tend to be a mix between melodrama and farce, with clownish archetypes, like churchy grannies and two-bit entrepreneurs. And they all have uplifting plots, usually about a woman torn between a glamorous philanderer, whose speech is laden with double-entendres, and a humbler, more dependable man, whom she eventually chooses. (The more muscular actors also have a tendency to take off their shirts.)

More than a marketer’s demographic description, urban theater is a genre like the sitcom or courtroom thriller, and experiments tend to fare poorly. David E. Talbert, a 15-year veteran of the circuit, said he once wrote a pure comedy without an inspirational message and was bluntly advised by audience members not to try it again.

Mr. Talbert, 40, is the other powerhouse on the circuit, along with I’m Ready Productions and Mr. Perry. By Mr. Talbert’s own estimate, he has grossed $75 million over the last decade and a half with 12 plays, and counting. He likens himself to Neil Simon as a playwright who tries to cater to his audience’s wants and tastes rather than hew to some establishment idea of high art.

Mr. Guidry, 33, and his producing partner, Je’Caryous Johnson, 29, the author of “Gold Diggers,” are not so content with the status quo. They have departed from the form somewhat by adapting popular romance novels to the stage; like many younger people in the business, when they first began attending the plays, they felt the quality was, well, not great. Granted, they added, theatrical distinction has never really been the main point. That point, in the view of many, has been simply to have theater by, for and about contemporary black people.

Antonio Banks, who was snapping and selling souvenir photographs in the lobby of the Lyric, summed up a prevailing attitude among theatergoers: “Not much is offered to them,” he said. “If they can find an outlet, even if it’s not really good, it helps them escape from reality for a while.”

That attitude has been changing. One reason, said Laterras R. Whitfield, a 28-year-old from Dallas who broke into the field four years ago with “P.M.S. — It’s a Man Thang,” is that the market is becoming saturated.

“It appears to be so easy,” he said, “that a lot of people say, ‘Hey, I can do this,’ and they just write a play and find somebody silly enough to promote it, and then people go see it and say, ‘What is this mess?’ ”

The target audiences, in general, do not have much disposable income, and having been burned too often with bad plays, they are more discriminating. The excitement of going to see theater made explicitly for them, Mr. Johnson said, is no longer enough. Without the equivalent of a Broadway imprimatur to guarantee a certain level of production quality, though, reassuring theatergoers is not easy.

“If I tell you ‘Les Miz’ or ‘Cats’ or ‘Hairspray,’ you immediately know what I’m talking about,” said Brian Alden, whose North American Entertainment Company promotes Mr. Johnson’s plays. “In urban theater, we’re marketing an unknown product, so generally we’re marketing a name.”

But outside of Mr. Perry — who has also acted in many of his plays, most notably in drag as the vigilante grandmother, Madea — there are no writers or producers everyone knows by name, except for some of the older gospel impresarios, who no longer have the buzz they once did.

So active producers are now heavily casting recognizable film and television actors and singers.

At a recent, crowded performance of Mr. Talbert’s new play, “Love in the Nick of Tyme,” at Newark Symphony Hall, none of the dozen or so audience members interviewed knew Mr. Talbert. They did, however, know the name of the male lead, Morris Chestnut, the heartthrob film and television actor. Mr. Chestnut and other familiar faces in the circuit are not in the top ranks of fame; former sitcom stars tend to be particularly well represented. But they are celebrities of a caliber that would have been unheard of in a gospel play 10 years ago.

Increasing star power and the box office success of Mr. Perry, who is now developing three television series and a few more movies, are signs of the circuit’s move into big business.

But there are still few signs of acceptance by the cultural establishment. Reviews of Mr. Perry’s first two movies, which were based on his plays, were overwhelmingly negative.

For now, critical disregard can be a selling point. On Feb. 13, the day before the opening of “Daddy’s Little Girls,” Mr. Perry’s latest film, he sent an e-mail message to the members of his database, complaining of the skepticism from Hollywood insiders and journalists.

“It is as though we are all so unsophisticated that we won’t support a great movie about a good father,” the message read. “We know the truth, so let’s show them at the box office.” (The first weekend grosses were estimated at a robust $17.8 million.)

Mr. Perry declined to comment for this article.

The circuit’s position in the universe of black theater — particularly as distinct from the work of black playwrights presented in literary theater — is a topic that has long been discussed. While some scholars and theater professionals have criticized gospel plays for trafficking in stereotypes, others see it as another kind of drama, even finding, as Henry Louis Gates Jr. put it in a 1997 article in The New Yorker, “something heartening about the spectacle of black drama that pays its own way.”

Kenny Leon, who is directing the Broadway-bound production of August Wilson’s last play, “Radio Golf,” works in the same building as Mr. Perry in Atlanta. “I look at theater that is produced at some of the regional theaters and theater that is produced on that circuit as two different things,” he said. “We shouldn’t try to make them be the same things.”

No figure attracts more conflicting opinions than Mr. Wilson, who died in 2005. Mr. Talbert, being almost hypnotically unflappable, is not shy about his view: if the audiences who go to Mr. Wilson’s plays are predominantly nonblack, he asked, then how significant could he be to black people?

But Mr. Guidry and Mr. Johnson, the young Turks, think the genre can continue to develop while still staying true to its traditions. In 2002, when they produced an adaptation of Michael Baisden’s “Men Cry in the Dark,” they did not advertise its basis as a best-selling romance novel, fearing it would alienate the church-based audiences. Now a play’s origin as a novel is a selling point.

And as for Mr. Wilson, Mr. Guidry said that “Fences,” Mr. Wilson’s Pulitzer Prize-winning play, could do perfectly well with some judicious trimming, a little more comedy and, of course, a savvy marketing campaign.

“Man, if it were called ‘Big Man, Stronger Woman,’ ” Mr. Guidry said, “this thing could tour.”
http://www.nytimes.com/2007/02/21/th...urba.html?8dpc





A Media Mogul Tries Remote Control
Ron Stodghill

ROBERT L. JOHNSON, the black billionaire, is ringside at a charity boxing match here, awash in a sea of white businessmen. A low-key deal maker, he prefers intimate dinners with the likes of Bill Clinton, Harvey Weinstein or John Malone. But tonight he has joined members of the South’s ultra-elite for a quasi-frat party, a swaggering, testosterone-fueled evening featuring hundreds of tuxedo-clad honchos feted with steak and martinis and greeted by scantily-clad hostesses. Mr. Johnson takes to the slugfest as the night wears on, rolling his shoulders to dodge imaginary blows, as if he himself were up against the ropes.

Which, perhaps, he is.

Mr. Johnson, who founded and then sold the Black Entertainment Television network to Viacom for $3 billion in 2000, is working hard these days to appear as more than just an outsider in Charlotte, where he also happens to own the beleaguered local National Basketball Association franchise, the Bobcats. So far, though, that is pretty much how the locals view him. There may be many reasons why the label of outsider clings to Mr. Johnson, but one easy explanation is that he rarely gives the Bobcats hands-on treatment.

As Mr. Johnson tries to recast himself as a mainstream business mogul, his calendar has become very crowded, thanks to a high-powered push to start and buy several companies. That spree has produced a sprawling portfolio of properties, including a hedge fund, a private equity firm, a chain of more than 100 high-end hotels, several commercial banks and savings institutions, a film company and several gambling ventures.

And however loudly each of those businesses may clamor for his attention, however boisterously the communities they serve may want more face time with the boss, Mr. Johnson is in no rush to soothe their nerves.

“I am not an operational executive anymore,” he says, impatience creeping into his voice. “I run a holding company, and my role is that of a rancher, running herd over a field of cattle.

“It’s not just one ball in the air for me now, but lots of them,” he adds. “This is my second act.”

As Mr. Johnson zips across the business landscape, trying to defy the aphorism that there are no second acts in American life, his handling of the Bobcats, which he bought in 2003 for $300 million, may provide a crucial litmus test. Mr. Johnson, the first African-American owner in a league populated by African-American stars, is intent on using his wealth and celebrity to break down economic and cultural walls that have historically marginalized black entrepreneurs, and to give black executives corner offices in a broad range of industries. So he sees a successful run as the head of a professional sports franchise as an emblematic challenge.

For all of that noble sense of purpose, though, Mr. Johnson is a famously flinty loner. His go-it-alone attitude has done little to soften his image among some here as a person simply looking to milk a Southern boomtown. That image, along with a reluctance to pour more money into the Bobcats, has not endeared him to local fans — helping to undermine his fledgling hoops franchise.

The basketball legend Michael Jordan, who joined the Bobcats last summer as a minority partner and manager of operations, attributes Mr. Johnson’s strains to the rigors of the learning curve. “Bob is one of the most sophisticated businessmen that I know, but being that he didn’t have any experience in this business, he may have been more tight with the dollars than he should have been,” he says. “But Bob knows now that he’s got to spend, that being successful in professional sports requires a whole different approach. Like me, he’s very competitive and knows how to win.”

Mr. Johnson’s attendance at the charity boxing match last month was a good-will gesture toward a city that has rebuffed him by considering him an absentee owner, a carpetbagger of sorts, and labeling the Bobcats as scrubs. Ever indefatigable, he says he has plenty of time to change all that.

“We’re still early in this process,” says Mr. Johnson, whose team has a record and attendance that rank near the bottom of the league. “Nobody loses money on an N.B.A. franchise, and I will certainly not be the first.”

BOB JOHNSON has spent at least half his 60 years as a pre-eminent force in African-American pop culture, a shrewd backstage operator who tied a bow around black celebrity and converted urban music, fashion and comedy into the cash cow called BET.

While running BET, which he founded in 1980, Mr. Johnson found himself routinely criticized by blacks for showing racy music videos day and night instead of creating original programs with socially uplifting themes. In Mr. Johnson’s pragmatic view, though, music videos were a television executive’s dream: they drew huge audiences and were cheap to put on the air. He reminded naysayers that the “E” in BET stood for “entertainment,” not “education” or “enlightenment.”

“My tombstone will read: ‘This is the guy who aired rap videos,’ ” Mr. Johnson says. “But you know how I deal with that? I put it where it belongs, which is in the pretty-much-irrelevant category.”

Many blacks lashed out at Mr. Johnson again when he sold BET to Viacom, a mainstream corporate buyer. Mr. Johnson, who has blended a surgeon’s emotional detachment with an accountant’s fixation on the bottom line throughout his career, seems unaffected by those barbs as well. He says he is aware that some consider him miserly and emotionally disengaged, but he shrugs that off as the price of success.

“I never saw myself as running a family business for family benefit; I always wanted to create businesses that were built on maximizing shareholder value,” Mr. Johnson says. “And my philosophy has always been predicated on the fact that talented African-Americans ought to be given an opportunity to create real wealth in this country, and that white Americans have to allow us to get onto the starting blocks.”

For Mr. Johnson, born in Mississippi in 1946 as the ninth of 10 children, the starting block was a grimy factory basement in Freeport, Ill. His mother and father had jobs at the Burgess Battery plant in Freeport, and Mr. Johnson worked there as a maintenance worker one summer while attending the University of Illinois at Champaign. According to “The Billion Dollar BET,” an unauthorized account of Mr. Johnson’s career by the journalist Brett Pulley, Mr. Johnson clashed often with his superiors and was fired. The boot, though, came with some advice. “If you’re going to get a job, you better work for yourself,” his supervisor told him, according to the book. “Working for other people just doesn’t seem to be your cup of tea because you’ve got a unique way of how you want to do things.”

After graduation from the University of Illinois, where he met his wife, Sheila Crump (they divorced in 2002), Mr. Johnson studied public administration at Princeton. The couple moved to Washington in the early 1970s, a time when the civil rights movement was opening the door to more black voices in the media. Mr. Johnson worked in various public affairs posts before becoming a lobbyist in 1976 for a cable television trade group.

One of the group’s board members was John C. Malone, who was in the early stages of turning his company, Tele-Communications Inc., into one of the nation’s largest cable companies. Mr. Malone and other cable operators were scrambling for programming that would give them an edge over traditional network television giants. Mr. Johnson approached Mr. Malone with the idea of creating a cable channel that catered to audiences in cities with large black populations.

“I was like Johnny Appleseed back then, buying up lots of things that fit our model because we needed programming,” Mr. Malone says. “It was great that Bob’s idea had a positive social element to it, but it also fit my model.”

Mr. Malone jumped at the idea, and in 1979 invested $500,000 for a 20 percent stake in the newly formed BET. Over the next decade, BET slowly gained traction with black audiences, gradually expanding its air time from a few hours a day to a full weekly schedule, recruiting major advertisers and lining up other strategic partners like the HBO unit of Time Inc. BET’s gospel programs, black college sports, and black news and music gave the channel a solid niche.

“We were the unicorn,” Mr. Johnson says. “People were surprised we existed.”

In 1991, Mr. Johnson took BET public, making the network the first black-owned company on the New York Stock Exchange. Mr. Johnson retained 56 percent of the voting power in a company with a market value of $472 million, according to Mr. Pulley’s book. Despite that success, BET had doubters. “I think the public was very cynical about a black-run and -controlled business,” Mr. Malone says. “There were a lot of bodies in the cable industry on the side of the road. The attitude was, ‘Let’s give it a shot, but I don’t expect it to be successful.’ ”

TO continue attracting larger black audiences without huge investments in content, Mr. Johnson began to rely more heavily on music videos. After all, with ad rates substantially lower than those of rivals like MTV or VH1, the notion of creating high-minded original programming was not financially feasible, Mr. Johnson says. But by the early 1990s, gangsta rap music was gaining cultural prominence and its messages were edgier — and more rife with images of sex and violence — than the R&B music that BET had offered earlier. Many adults were offended, but young viewers loved the stuff.

“Bob took a cold view in responding to the market, and the fact was he just didn’t have the financial muscle of an MTV,” says the media consultant Willis Smith, whose firm in Durham, N.C., specializes in black television programming. “He could not afford to offer what many viewers wanted from him. But in the end, he kept BET profitable regardless of what people have said about the quality of his programming.”

Mr. Johnson’s most vocal critic was the young black syndicated cartoonist Aaron McGruder, whose “Boondocks” comic strip ran in 250 newspapers nationwide and focused on a couple of brothers transplanted to the suburbs from their inner-city neighborhood. He routinely lampooned BET. One of his most controversial strips featured a woman’s round, nearly nude backside, with text that, among other things, said: “In order to follow the fine example set by Mr. Johnson, we present to you, the reader, in the spirit of black uplift — a black woman’s gyrating rear end.”

Some newspapers dropped the strip, and it ignited a public spat between Mr. McGruder and Mr. Johnson. Mr. Johnson declines to discuss the matter, and Mr. McGruder, who no longer writes the strip, was unavailable for comment.

By the late 1990s, having regained complete control of BET for himself and Mr. Malone through a stock buyback, Mr. Johnson was ready to move on. The opportunity came when Sumner M. Redstone, the Viacom chairman, offered to buy him out for $3 billion in 2000.

“A lot of black people were hurt when he sold BET because we have this history where our entrepreneurs are expected to be emotionally attached to their companies,” says Alfred Edmond Jr., editor in chief of Black Enterprise magazine. “But Bob Johnson has never been one to personalize his relationship to his companies. They are just assets to him, and he prides himself on being able to drive up their value.”

However much Mr. Johnson has sought to burnish and enlarge his reputation, his ownership of the Bobcats has resurrected some old criticisms. Like television, the basketball business is driven by ratings, advertisers and talent — and so far Mr. Johnson has stumbled, in large part over issues that have haunted him before: customer complaints about product quality, and accusations of a lack of commitment to the community.

“There has been a feeling here that Bob — and he is trying to do better — is this rich dude from Washington, D.C., and comes down and buys a franchise and doesn’t even show up here much, not even for games,” says Felix Sabates, a Charlotte businessman and minority shareholder in the Bobcats. But he expects Mr. Johnson will be successful.

Mark Packer, a local radio host, says: “In a city like Charlotte, it is important for fans to see the owner, and we don’t see much of Bob Johnson. But even more than that, the product that he is putting on the floor is an inferior product. Over the two and half years he has had this team, he simply hasn’t spent enough money to put a winner on the floor.”

The criticism does not end there. Scott Fowler, a columnist at The Charlotte Observer, wrote recently that “thousands of people in our area view the Bobcats with resentment or indifference.”

“These folks wouldn’t go to uptown Charlotte to watch a Bobcats game if someone handed them free tickets and pointed to a limousine to take them there,” he added. That’s a hard knock in a sports town where Mr. Johnson’s polar opposite, Jerry Richardson, the white founder of the Carolina Panthers of the National Football League, ferries his fans around in a golf cart. The owner-as-average-guy touch and the Panthers’ success on the field have endeared Mr. Richardson and his team to locals.

ON the afternoon before the charity boxing match, Mr. Johnson sits in a Charlotte eatery, a few blocks from the Bobcats’ yet-to-be-named coliseum, reflecting on the history of black capitalists in America — a past, he says, that is painfully slight.

“The fact is, black people do not have much of a history in creating wealth in this country. As a result, we are not trusted to handle other people’s money,” he says. “We are valued mostly for our physical talent, our artistic talent and maybe our ability to sell to other blacks. But when it comes to building value in companies, or managing the money of whites, overseeing investments, there has always been this discrimination.”

He shrugs and stabs his crab cake. “But let’s face it, on the other hand, race discrimination gives me a natural public relations advantage. Because of race discrimination, I can get a pat on the back just for being first,” he says. “That’s how I get the visibility, the first-mover advantage. That’s what I like — to enter the arena first.”

Mr. Johnson has just returned from Utah, where he attended the Sundance Film Festival in search of opportunities for Our Stories, a Los Angeles-based film company he started late last year. The trip was bittersweet. While the dearth of black-oriented films at the festival disappointed him, it also solidified his faith in the prospects for his new venture. His partner is the indie-movie mogul Harvey Weinstein, whose own new enterprise, the Weinstein Company, will serve as his distributor. JPMorgan Chase has sunk $175 million into Our Stories.

“What I like about Bob is that he dreams over the horizon when most people can’t,” Mr. Weinstein says. “This is about an African-American entrepreneur who is starting a black-owned movie studio because he stepped forward and had the expertise to pull it together.”

In a sense, the financial model for Our Stories — tapping the resources of mainstream white investors as a means of gaining the economic efficiencies afforded by scale — is how Mr. Johnson has built most of his companies, and it distinguishes him from most of his African-American counterparts. His private equity fund, for instance, is financed partly by the Washington-based Carlyle Group, while his hedge fund has backing from Deutsche Bank.

Other black entrepreneurs, like Madame C. J. Walker, the black hair care products maven; Alonzo Herndon, founder of the Atlanta Life Insurance Company; and John Johnson, the publisher of Ebony and Jet magazines, also made fortunes in niches selling products aimed at black customers — but their financial platforms were mostly homegrown and their market visions more narrow. Bankrolled with personal savings or family loans, and powered by social as well as economic goals, most African-American businesses were passed down to family members with little concern for outside investors.

There are, of course, exceptions, like Wally Amos, the founder of Famous Amos cookies. “I knew there were people who would not buy my cookies because I am black,” says Mr. Amos, who started his company (which is now owned by Kellogg) in 1975. “But that was not my problem; it was theirs. To me anybody with a mouth was a potential customer.”

Mr. Johnson says his approach is like that of the late Reginald F. Lewis, the black Harvard Business School graduate and corporate lawyer whose venture capital firm acquired Beatrice International Foods, the global food, beverage and grocery store conglomerate, in 1987 for $985 million. The transaction, bankrolled partly by the onetime junk-bond king Michael R. Milken, created the largest black-owned business in the United States, with annual revenue of $1.8 billion.

“Look, the social activist mold that was poured for Al Sharpton or Jesse Jackson or Vernon Jordan was not poured for me; the artistic mold that was poured for Oprah Winfrey and Jay-Z was not poured for me, either — that is not the DNA that I got,” Mr. Johnson says. “The mold that was poured for me is the same one that was poured for Ken Chenault, Richard Parsons, Stanley O’Neal. I create wealth and value. That’s what I do, and I’m good at it.”

Mr. Malone concurs and says that blacks have been unfair to Mr. Johnson. “It’s a real challenge in the black race to be successful and not be regarded as having sold out,” he says. “It’s a terrible shame that the entire black community doesn’t embrace people like Bob, honor him.”

In Charlotte, at least, Mr. Johnson has his share of white critics. So while it might be convenient to attribute Mr. Johnson’s struggles with the Bobcats as partly a function of the color of his skin, there is a strong possibility that a more involved, hands-on black owner might be enjoying a smoother honeymoon than Mr. Johnson.

IN the three years since he took over the Bobcats, Mr. Johnson has — largely from a distance — initiated a series of senior management shakeups and cuts, a move from an old arena to a new one and, for season ticket holders, a price increase followed by a price reduction. As the N.B.A. showcases its top athletes today at its annual all-star game in Las Vegas, no Bobcats players will be featured. The Bobcats reside at the bottom of the Southeast Division of the league’s Eastern Conference with 19 wins and 33 losses. And in a brand new arena that the city built for the Bobcats despite local opposition, the team’s home attendance ranks 27th among the N.B.A.’s 30 teams.

“I don’t know of a professional sports franchise that can fill up an arena when they’re in last place; you have to win games,” says Mayor Patrick McCrory of Charlotte. “It’s just that simple.”

It doesn’t help that Charlotte fans still nurse a grudge over the last pro team that rolled into town. Back in the late 1980s, the businessman George Shinn started the Charlotte Hornets but relocated to New Orleans after his unsuccessful bid for a new basketball arena.

Mr. Jordan, the former Chicago Bulls star, says: “There has been a wedge that’s been created here. There was trust and respect that had been earned and then the team leaves. People are still upset about that.”

For his part, Mr. Johnson says he is ready to mend those wounds. Yet even as he tries to demonstrate passion for Charlotte and the Bobcats, he sounds the notes of a brass-tacks, no-nonsense entrepreneur. “I like this city,” he says. “It’s business-oriented. It’s got the big banks; the government is profit-oriented; it’s a transportation hub. It’s non-union.”

It is that approach that leaves some observers wondering whether Mr. Johnson has what it takes to lift the value of a sports franchise that, in the end, is linked to team loyalty and winning. As Mr. Edmond of Black Enterprise observes: “What makes him a great entrepreneur may end up handicapping him as the owner of a sports franchise where fans expect owners to love the team as much as they do.”
http://www.nytimes.com/2007/02/18/bu...18johnson.html





For New Line, an Identity Crisis
Sharon Waxman

For six weeks in 2005, Robert K. Shaye, the founder and co-chairman of New Line Cinema, lay in a coma in a New York City hospital, fending off death from a sudden infection.

He survived, narrowly, and over many months quietly made his way back to health, a dizzying and unexpected turn for one of Hollywood’s mavericks.

Now Mr. Shaye, 67, is back to what he has done for nearly 40 years, running New Line, a midsize studio in a world of competitive behemoths, at a time when the company, owned by Time Warner, has been beset by rumors of dysfunction and executive change, and bedeviled by a slate of unsuccessful films in 2006.

That too is an unexpected turn for a studio that three years ago capped the phenomenally popular “Lord of the Rings” series with a best picture Oscar for the last installment, “The Return of the King” — a first for the studio.

Since then, according to both Mr. Shaye and Jeffrey L. Bewkes, the president of Time Warner, the studio has been financially successful, earning more than $100 million every year for the last three, largely in revenue from previous hits that continues to stream in through DVD and other post-theatrical sales. “New Line is very profitable,” Mr. Bewkes said in an interview. “We’re making money hand over fist.”

But in Hollywood and on Wall Street, some question the focus at New Line. After the success of “Lord of the Rings,” some had expected the studio to pursue a more ambitious agenda than the urban comedies and horror films of its past. That might have included pressing ahead with “The Hobbit,” from the “Rings” author J. R. R. Tolkien, to which New Line shares the rights.

Instead, Mr. Shaye has been trading insults with the “Rings” director Peter Jackson, while the studio has struggled to find a new breakout hit.

“I wouldn’t characterize it as financial crisis, even if they had a bad year,” said Harold L. Vogel, an entertainment analyst. “It’s more like an identity crisis. It’s a fair question: where do you go from here? Everyone has the same problem, whether you’re 90 or you’re 20. And they’re facing it now with a little more emphasis.”

If critics have observed that the studio seems distracted, there may be good reason. Mr. Shaye’s illness, the seriousness of which was not disclosed to the public before now, apparently derailed the studio for a portion of 2005 and affected the slate in 2006. And last year he took time to direct his own movie, “The Last Mimzy,” a family-oriented science fiction adventure (co-written by New Line’s president of production, Toby Emmerich) that will open in theaters next month.

In an interview in his office in Los Angeles last week, Mr. Shaye said that he had as much enthusiasm for running his studio as ever, and said he believed that this year’s releases would do well. “I started this company in 1967,” he said. “I still come to work every day. I still have the same passion I had then.”

Mr. Shaye acknowledged his disappointment in the studio’s performance in 2006, with duds like “Snakes on a Plane,” which cost $33 million to make and took in only that much in domestic theaters despite higher expectations, and “Tenacious D: ‘The Pick of Destiny,” the Jack Black comedy with a budget of less than $20 million, which took in a scant $8 million in domestic ticket sales.

“After last year I will take a more considered approach to the green-light process,” he said. “I will act as more of an adversary, or critic, of the decisions advocated by others.”

But he said the studio would continue to aim for its traditional zone of comedies and genre films, with a couple of highbrow dramas and one or two big-budget bets, in the range of $100 million and above.

For this year, those big bets include “Rush Hour 3,” the next in the successful series of martial arts comedies, and “The Golden Compass,” a fantasy adventure with special effects and a budget of $150 million, a potential new franchise for the studio.

The studio has also secured a $350 million line of credit in a financing deal with the Royal Bank of Scotland, giving it a financial cushion.

Mr. Shaye spoke in detail for the first time about the illness that almost killed him two years ago. In March 2005, he said he suddenly came down with a lethal form of pneumonia, from streptococcus A bacteria, similar to a rare illness that precipitously killed Jim Henson, the “Muppets” creator, at age 53 in 1990.

On the advice of a doctor, Mr. Shaye checked into NewYork-Presbyterian Hospital and was placed in a medically induced coma in the intensive care unit for six weeks. (In his film “Mimzy,” Mr. Shaye names one character Dr. Sherman, in tribute to one of his caregivers.)

He emerged from the coma and after two months in the hospital, he was permitted to go home to his Manhattan residence. Even then he took many months to recover, unable initially to walk for more than two or three minutes at a time, and slowly taking up work again.

But Mr. Shaye says he thinks more clearly now than he did before his illness. “It’s difficult to explain, but I have a clarity of thought and, I believe, of reason, which was one of the gifts” of his illness, he said. And, he added, “I certainly appreciate the normal functioning of life a lot more.”

One thing that has not been blunted by illness is Mr. Shaye’s temper, which flared last year when he was asked about a lawsuit filed by Mr. Jackson over profits from “The Lord of the Rings.”

Mr. Shaye, criticizing what he called Mr. Jackson’s “arrogance” and calling the director “myopic,” told Sci-Fi Wire: “I don’t care about Peter Jackson anymore.” He added, “He wants to have another $100 million or $50 million, whatever he’s suing us for. He doesn’t want to sit down and talk about it. He thinks that we owe him something after we’ve paid him over a quarter of a billion dollars.”

Asked about the remarks last week, Mr. Shaye said that he made the statement “in a moment of emotion” but did not regret it. “I regret losing a friend,” he said, as he showed a visitor a Gandalf sword that Mr. Jackson had sent him as a gift, before the lawsuit.

A representative for Mr. Jackson declined to comment.

But the ill will has held up plans to make “The Hobbit.” Without specifically saying he would not make the film with Mr. Jackson, Mr. Shaye made it plain that he had no interest in working with difficult filmmakers. “Some directors are impossible,” he said. “Are there a few people I wouldn’t work with? Yes, but I won’t name names.”

And he would not comment on reports in the news media that the “Spider-Man” director Sam Raimi had been asked to direct “The Hobbit.” He said, however, that although there was no workable script yet for the film, he intended to release it in 2009.

The Hollywood rumor mill has worked overtime in debating the future of New Line, which has had to justify its existence repeatedly over its 40-year history. Some people have questioned, for example, why the studio that made Will Ferrell’s breakout hit “Elf” in 2003 has not made other movies with him.

Until now. This month New Line began production on “Semi-Pro,” starring Mr. Ferrell; Mr. Shaye said that Mr. Ferrell had not found material he wanted to make at New Line until now, and chose not to make a sequel to “Elf.”

And although the studio is now part of Time Warner, current and former executives said that it continues to operate much like a family. Mr. Shaye, the father figure of the group, described his partnership with his co-chairman, Michael Lynne, this way : “I’m emotion. He’s reason.”

But as in a family, some producers and agents complained of confusion in their business dealings with the studio. Several said they had made deals with Mr. Emmerich or another executive at the studio, only to have Mr. Shaye redefine the terms later.

An executive connected with the coming film “Rendition” said the same thing happened on that project, a big-budget production under way in Morocco, starring Jake Gyllenhaal, Reese Witherspoon and Meryl Streep. Weeks after the producers closed the deal with the studio, said the executive, who spoke on the condition of anonymity to protect his business relationships, Mr. Shaye came back to them and placed additional conditions, like finding a financing partner.

In an e-mail message, Mr. Emmerich disputed that account, saying that Mr. Shaye had reservations about the script from the start.

Still, some agents and producers point out that the loose atmosphere at New Line can also lead to daring decisions, like the one that led to the “Lord of the Rings” trilogy.

Mr. Shaye denied that any executive changes were in the works, and said that Mr. Emmerich would continue to run production, while Russell Schwartz would continue to run domestic marketing.

Mr. Bewkes, the Time Warner president, said that he regarded the three years of success with “Rings” to be an anomaly — albeit one that brought in well over $3 billion in revenue to New Line.

“The business they’re in is a combination of all those ‘little titles,’ which add up to a steady stream for the indie business, and occasional but pretty regular big commercial franchises, like ‘Rush Hour,’ ‘Lord of the Rings’ or ‘The Golden Compass,’ ” he said. “I feel confident about New Line’s future.”

And Mr. Shaye, whose contract is up in 2008, seemed to fully agree. “It’s never business as usual, because the business is unusual,” he said, adding, “but we’d rather work on movies than anything else — every one of us.”
http://www.nytimes.com/2007/02/19/bu...dia/19new.html





The Old Guard Flexes Its Muscles (While It Still Can)
Richard Siklos

JEFF ZUCKER, the newly minted chief executive of NBC Universal, ventured to the Times Square headquarters of Viacom two Wednesdays ago with Peter A. Chernin, president of the News Corporation. It was not a social call as much as a social-networking call, to see Philippe P. Dauman, Viacom’s chief executive. After all, Viacom had rather publicly ordered YouTube, the Internet’s most popular video-sharing site, to remove thousands of clips of MTV material.

A few weeks earlier, Viacom had also bowed out of a partnership with NBC and the News Corporation to set up their own alternative to YouTube, which was recently acquired by the search juggernaut Google. Not to be dissuaded, their idea is that a Web start-up featuring the broadcasters’ most Web-friendly fare (comedy clips and even whole episodes of their popular shows) could gather a crowd on its own and also be a powerful consortium for licensing content to other destinations around the Web — including, of course, “GoogTube.”

According to people briefed on the visit, Mr. Zucker and Mr. Chernin ran through a presentation on why they thought Viacom ought to rejoin their group. So far, Viacom has not rejoined the venture, and the project’s fate remains unclear. (No love is lost between Viacom and the News Corporation, since the latter snatched MySpace.com from under Viacom’s nose.)

Yahoo, meanwhile, eager to regain some ground on Google, has been courting the media giants to let it distribute their video wares.

YouTube is not standing still. It is trying to curry public sentiment in the same way that cable and satellite operators have done in battles with channels that won’t agree to terms with them: by public shaming.

When I tried to search for a Viacom clip on YouTube, it had not only vanished but had also been replaced by a red banner saying the video had been “removed at the request of Viacom International.”

It has become evident that the question of who will rule video on the Web is incredibly tangled. For now, most of the sticky strands lead to Google, and big media companies are trying to figure out whether to fight it or join it. That already hard question has been complicated by some fresh headaches for Google.

First, The Wall Street Journal reported last week that Google had sold advertising that encouraged pirating of Hollywood movies to a couple of rogue Web sites. While the incident was minor in the context of Google’s huge advertising business, it didn’t help soothe its tense relationship with content providers.

Then, a few days later, a Belgian court ruled that Google’s news-aggregating service, Google News, has been violating copyright laws by providing links to French-language newspapers.

Google took pains to characterize both incidents as the sort that often confront big, fast-growing companies. As a company spokeswoman in London said of the Belgian ruling, “This is an isolated case, and it would be inaccurate to portray Google News as standing in conflict with the publishing industry.”

Yet it’s also not hard to detect a worrying pattern here for Google — and for those who wish to be Google. The company controls as much as two-thirds of the market in search advertising, by some accounts. That has already caused plenty of worry among print publishers who wonder if the benefit of being on Google’s global platform is mitigated by what happens to their intellectual property once Google’s search engines get their robotic hands on it.

The worry widened to include the titans of television and cable programming after Google’s buyout of YouTube late last year. The buyout raised the possibility that Google would extend that advertising dominance into video — a business that is exploding online and for which advertisers already spend some $60 billion on conventional television.

The genius of Google, of course, is that it excels at organizing the world’s information and automatically attaching advertising to search results in an efficient, relevant way. If Google can more efficiently serve ads to people who are, say, watching the Grammys on 50-inch screens in their living rooms, that may add to its dominance.

It is hard not to conclude that the media establishment’s threats to start its own rival to YouTube — as well as Viacom’s yanking of its popular clips from the site — amount to posturing. What it might really be about is securing a lucrative deal from Google that would end hostilities in exchange for guaranteed cash and a healthy split of revenue from any advertising the company derives from their video content.

Google has consistently taken the position that it is the ally of those who create and own content — these latest hiccups notwithstanding — and that its technology can help them make more money online then they could on their own.

But Google’s sheer size and heft — including its rich margins and $140 billion market value — are viewed enviously and warily by media companies. They all wonder: Just how much of that value is coming out of my pocket?

Thus, the issue of making deals with content companies has quickly led to a kind of Catch-22 for Google. As one Hollywood executive, who didn’t want to be identified because of the continuing negotiations, said of Google: “The more content they license, it begs the question: what about all that other unlicensed stuff you’ve got up there?”

To make matters even more complicated, a big focus for media companies right now is to share the wealth with everyone who creates valuable content, not just the pros. YouTube has said that it will follow the trend of other video sites and Web businesses by figuring out a way to give some share of revenue to people whose homemade videos attract the most viewers.

Google’s media partner-rivals are also now asking why Google won’t just voluntarily use its technical prowess to ferret out copyrighted material. (After all, they say, the company seems to keep pornography off YouTube rather effectively.) To drive home the point, MySpace trumpeted just such a copyright filtering feature for videos on its popular social networking site last week.

INTELLECTUAL property law is clear that the legal impetus, for now, rests with the copyright holder to tell a Web site to take down unauthorized material. Indeed, it would be cumbersome to ask every kid with a community site to spend his days policing what the members have posted.

The media giants have a point, however, when they ask why they even have to cajole Google, a self-professed friend, to make nice.

Yet Google and its brethren also have a point when they wonder if the media giants are only hurting themselves by pressing the copyright issue. They point out that their sites have served as great promotional venues — and that they do not charge the media companies a dollar for that help. Moreover, there are no barriers to entry to stop NBC, Viacom or anyone else from starting its own Web video efforts.

What we have here is the most fascinating game of digital chicken the media world has seen. Who will cluck first?
http://www.nytimes.com/2007/02/18/bu.../18frenzy.html





Art Review | 'The Rape of the Sabine Women'

Present at an Empire’s Corrupted Birth
Roberta Smith

Like the Neo-Classical history paintings on which it is based, Eve Sussman’s film “The Rape of the Sabine Women” never lets you forget that it is serious art. Extravagantly beautiful, endlessly noble and largely devoid of humor, it self-consciously pushes every aspect of movie-making toward sensorial overload.

Made by Ms. Sussman and the Rufus Corporation, this dialogue-free work, which could be called a video-opera, is to have its United States premiere tonight at a sold-out screening at the IFC Center in Greenwich Village. But the public-art organization Creative Time is presenting free public screenings there tomorrow through Tuesday — at 2, 6 and 9:45 p.m. — to coincide with the annual Armory Show art fair this weekend.

“The Rape of the Sabine Women” is dense, lavish and drawn out. It is larded with art historical references, startling juxtapositions and brilliant camera work and enriched by the faces, bodies, movements and general sexiness of a tribe of handsome young actors. Intricately edited, it jumps back and forth in time and alternates between color and black-and-white scenes, sharp and grainy definition, slow-motion and normal speed. Cinematic space deepens and then flattens. We see the actors in character, but also in their dressing rooms; we also glimpse cameras, crews and the musicians.

Most notably, all dialogue is replaced by an amazing original score by Jonathan Bepler. He worked with a host of musicians and singers, who sometimes improvised during filming. The heady weaving of sound and image is the work’s greatest strength.

The total experience of watching and listening to this extraordinary yet ponderous meditation on love, community and the senselessness of war is like eating a chocolate chip cookie made of nothing but the chips. There’s so much to savor that you may start hankering for a clear, cool glass of water.

Shot in Berlin, in Athens and on the Greek island of Hydra, the movie is an avant-garde costume drama in five acts. Its story is a variation on the ancient myth of the Sabine women, who after being abducted, raped and forced into marriage by Roman warriors, wade into a pitched battle between their husbands and their Sabine relatives to secure peace and the future of Western civilization.

The movie’s heroics and pageantry are inspired by the Sabine paintings of Poussin, Rubens and David — especially David’s “Intervention of the Sabine Women” of 1799. But Ms. Sussman’s “Sabine Women” is set in the endlessly stylish, initially optimistic 1960s.

The Roman warriors are trim young men in shiny suits with narrow lapels; they evoke the secret-agent chic of James Bond but also the deadening conformity of Sloan Wilson’s novel “The Man in the Grey Flannel Suit.” The women wear French twists, richly patterned mod dresses and big dark glasses that recall those of Jacqueline Kennedy and Maria Callas, rivals in the late ’60s for the affections of Aristotle Onassis.

The story begins after Romulus and his warriors establish Rome and realize that they must find mates and procreate if this city on the Tiber is to endure. Diplomacy fails; abduction is the only option. A sports festival — to which the inhabitants of surrounding cities are invited — is the trap.

For womenless Rome, Ms. Sussman substitutes the Pergamon Museum in Berlin, shot in glamorous black and white to the sounds of walking, coughs and murmurs. It is as if we were in the Roman Forum when the Senate was in session. A few young men orbit a statue of an enthroned emperor and eye a stone Greek goddess. An old museum guard, played by Nesbitt Blaisdell, one of the founders of the Rufus Corporation, looks on; he appears as an onlooker in every act, like the stage manager in “Our Town.”

Next, larger numbers of young men muster at Berlin’s International Style airport, Tempelhof — pacing, smoking, sitting, sometimes unfolding their newspapers or crossing their legs in Pina Bauschian unison. They shift into action, leaving the building; in one of the movie’s most striking shots, a lone warrior glides out through the stillness on a moving escalator ramp.

The spaciousness and order of these black-and-white scenes is countered by the crowded picture plane and dense color of the abduction scene, which Ms. Sussman sets in the thronged meat market of Athens. Recast as the butchers’ daughters, the Sabine women hawk their fathers’ wares with fabulously shrill, rhythmic cries and are whisked away one by one. A demure rape scene is enacted in a decaying room hung with a string of dead hare and fowl — a Chardin-like still life to which the camera lovingly returns at least twice too often.

Married life is recast as a party in a ’60s beach house on Hydra, shot in scorching color and filled with the artificiality and posing of an extended fashion shoot. In another moment of eye-catching stillness, a woman floats across the pool in an inner tube, fully clothed. The gathering starts in the afternoon with numerous children and, stretching into the night, includes a beautifully acted lovers’ triangle. Tension mounts, and the house begins to feel like a fort under siege.

The final scene shows the Herodion Theater in Athens, a Greek amphitheater shot mostly from above as it fills with large groups of people. Some, led by conductors, seem to form choruses. Others sit, stand, walk to and fro. The action and the camera shift to the bottom of the amphitheater, where the young men gather and start slowly to struggle. The young women, familiar from the meat market and the beach house scenes, descend through the crowd and join in. Clothes are torn, bodies are bared. The dust rises.

Despite their utopian veneer, the 1960s were arguably the beginning of the situation in which the world now finds itself. So it is not surprising that in Ms. Sussman’s version of the Sabine myth, everyone simply fights to the death, albeit in a stagey, slow-motion, painterly way. Ms. Sussman has recast the birth of a society as destruction.

Artistically, the film is an intriguing summation of the worldliness that began to enrich art in the late 1970s. While using Classical, Neo-Classical and International Style elements, it also draws expertly on 30 years of avant-garde appropriation and formalist self-reference. Its scenes may recall the cosmopolitan performances of Robert Wilson and Ms. Bausch; the photo-based art of Cindy Sherman, Richard Prince, Laurie Simmons, Robert Longo and Philip-Lorca Dicorcia; and the historicizing lushness of Neo-Expressionist painters like Julian Schnabel and David Salle, as well as the filmmaker-sculptor Matthew Barney.

Ms. Sussman has come a long way from her solo debut at the Bronwyn Keenan Gallery in SoHo in 1997, where she showed funky, live-feed video broadcasts of pigeons roosting in the building’s airshaft. By 2004, she had replaced Discovery Channel Post-Minimalism with Masterpiece Theater grandeur in “89 Seconds at Alcazar,” a mesmerizing 10-minute video projection that wended its way through what appeared to be a modeling session for Velázquez’s elaborate painting “Las Meninas.”

Fraught with whispered exchanges, rustling silks and discreet gestures, this piece became the breakout hit of the 2004 Whitney Biennial. And it put Ms. Sussman on the map, along with her collaborators, the group of improv-savvy actors, musicians and dancers that is the Rufus Corporation.

While “89 Seconds at Alcazar” grew from a projected 89-second time frame to fill 10 minutes with fly-on-the-wall tension, the 80-minute “Sabine Women” stretches its beauty before us with overindulged, seductive, feline opulence.

Free screenings will be shown tomorrow through Tuesday at IFC Center, 323 Avenue of the Americas, at Third Street, Greenwich Village; (212) 924-7771 or ifccenter.com.
http://www.nytimes.com/2007/02/21/ar...gn/21sabi.html





Recipe for Success: Take Mentos, Diet Coke. Mix.
Keith Schneider

IT’S easy to find Fritz Grobe’s house outside this wooded hamlet north of Portland. It’s the one with rows of empty two-liter Diet Coke bottles on the front stoop. Inside, there are more pallets of full Diet Coke bottles, stacked waist-high alongside cases of Mentos mints, a drill press, plastic caps and a pile of plastic cuttings.

Mr. Grobe, a 39-year-old juggler, performance artist and Internet video celebrity, has turned his large 19th-century house into a studio for EepyBird.com, an entertainment site distinguished by “Experiment 137,” one of the Web’s most-watched videos.

Mr. Grobe and Stephen Voltz, a 49-year-old lawyer and performer, turned the chemical reaction between Mentos mints (523, to be exact) and Diet Coke (101 bottles, to be precise) into a hilarious short film of geysers, which they posted on the Internet on June 3. The response, like mixing sugar with soda (doesn’t have to be diet, as it happens), was an online eruption that has not subsided.

The two comedians, who perform in white coats and goggles, have appeared on the “Late Show With David Letterman” and the “Today” show, as well as at fairs and exhibitions on two continents. In addition, they have signed video production contracts with the Coca-Cola Company and Perfetti Van Melle USA, the American unit of the European-based makers of Mentos.

The two have also attracted 10 million to 20 million viewers on the Internet. Nobody is sure of the exact count.

Still, the creators of EepyBird, named after a character that a friend invented, know that their tale of entrepreneurial adventure on the Internet is just the first act of a larger media drama overtaking their lives, where little players are drawing the attention of big players. It is also making them important players in shaping the young business of selling entertainment on the Web.

The second act of the drama, turning EepyBird.com and other such sites into durable enterprises, is also happening, as video file-sharing Web sites, including YouTube and Revver.com, attract tens of millions of viewers and hundreds of millions of page views daily.

Advertisers spent $180 billion in the United States last year, $15 billion of it on click-through, display and classified advertising on the Internet, the fastest-growing sector in the industry, analysts say.

EepyBird.com is among the small but growing fraternity of entertainment sites — like Askaninja.com, Rocketboom.com, Jibjab.com and Roosterteeth.com — that are starting to reap a tiny part of that ad revenue, while benefiting from sponsorships, celebrity appearance fees and other sources.

“The Internet is a social space, a new town square,” said Mr. Voltz, who was raised in San Francisco, where he performed as a juggler and fire eater on street corners. “If you’re an entertainer or an advertiser, you need to be there.”

Judson Laipply, a motivational speaker and comedian from Cleveland, is already there. His “Evolution of Dance” video on YouTube has attracted 41 million viewers. Last month, he was in Florida working on promotional projects with the Walt Disney World Resort.

OK Go, the power-pop band that earned a Grammy nomination, has relied on choreographed homemade videos to stir strong music sales, including one that has soared to the top of the YouTube most-viewed list.

Askaninja.com, a two-man production company in Los Angeles that has been showing short weekly comedy episodes for about a year, said that it had just signed a “seven-figure” deal allowing Federated Media Publishing to sell ads for the episodes.

Analysts aren’t sure whether these business models represent more than a splash.

“Where there are eyeballs, there’s money,” said Jeremiah Owyang, the director of corporate media strategy for a media network in Palo Alto, Calif., PodTech.net. “Producers are putting interesting content on the Web that they’re getting paid for. It’s just the start.”

Shelly Palmer, a managing director for Advanced Media Ventures Group in New York, was more skeptical. For now, the online entertainment business is producing “digital snacks,” he said.

“Anybody can become famous for 15 megabytes,” Mr. Palmer added. “But to be a real business, they have to be able to promote themselves without a viral success.”

So far, EepyBird.com is performing better than Mr. Grobe or Mr. Voltz had imagined, although neither would say how much they had earned. “Online viral video is a form of word of mouth, which is the most powerful way to build an audience,” Mr. Grobe said. “There is a lot of room online for the guy with a great idea.”

In October, the company posted a second three-minute Diet Coke and Mentos video, “Experiment 214,” which was produced under sponsorship agreements, one with the Coca-Cola Company and the other with Perfetti Van Melle USA. Everybody seems satisfied. Mentos sales in the United States climbed nearly 20 percent last year, their highest such increase ever. “It is safe to say the whole EepyBird Mentos geyser craze was a big part of the increase,” said Pete Healy, the company’s vice president for marketing.

Coca-Cola is so enthusiastic about EepyBird’s use of its product that it ran “Experiment 214” for more than three months on its home page at coca-cola.com. It also promoted a competition this month to encourage people to submit their own videos.

Mr. Grobe and Mr. Voltz said they were talking to the Discovery Channel and the History Channel about making a television program on science.

Great adventures often begin small; with EepyBird, that occurred in November 2005, when Mr. Voltz and Mr. Grobe discovered the reaction made by mixing Mentos and Diet Coke. The next evening, they conducted their first experiment before a live audience. People went wild, Mr. Grobe said.

Six months later, after working to produce more interesting geysers, they finished “Experiment 137,” and submitted it to an E! Online competition. Hearing nothing, they created their Web site, and posted it there. Mr. Voltz e-mailed his brother in San Francisco to tell him about the video. His brother e-mailed a friend, who e-mailed another, who posted the link on Fark.com, an information and technology site. By day’s end, 14,000 people had viewed the video.

The next day, Slashdot.org, another technology site, posted a link to the video. By the third day, a television producer who had seen the video on a German technology site called from the David Letterman show.

“We told one person, one person!” Mr. Grobe said. “The thing just took off.”
http://www.nytimes.com/2007/02/20/bu...=smallbusiness





For Sale by Teenager: Lightly Used Gadget. Cheap.
Eve Tahmincioglu

MANY of today’s teenagers are sitting on a growing pile of consumer electronics — items like MP3 players and laptops. And as they acquire the latest models, more of them are realizing that they can turn their older gadgets into cold hard cash.

Consider Greg Stoft, 18, who lives with his parents in Fremont, Calif. He wanted to buy a $45 skateboard, but he doesn’t work and his parents recently decided to tighten the purse strings, he said. To get the money, he decided to sell his used iPod Nano on Craigslist, the free online bulletin board.

The ad said: “White ipod nano, 4GB, no bad scratches. I don’t need it anymore.” He posted it one evening early this month with a price of $90 and by the next morning he had sold it for $70. “It was easy,” he said.

Not a bad return on investment, considering that the Nano was a gift from his parents, who were fine with him selling it, he said. And he is not worried about going without: his parents bought him a new video iPod this last Christmas for around $300.

“It’s the first time I ever sold anything like that, but lots of kids I know sell their iPods and stuff,” he said. “I thought: Why shouldn’t I do it?”

Mr. Stoft is among a growing group of teenagers who are creating their own slice of capitalism, one sale at a time. Part of the reason is that households with teenagers typically have 35 consumer electronic products, on average, compared with 24 products at homes with no teenagers, said Joe Bates, director of research for the Consumer Electronics Association, based in Arlington, Va. In the 1980s, he said, the typical household had four or five such devices.

“We don’t have hard data on teens buying and selling these products, but it makes perfect sense,” Mr. Bates said. “Teens just own more electronics today and because they do, they have technology that’s still working and they want to redistribute it. We see a shift in how people are using their tech. Teens like to get something newer before the old product is no longer unusable.”

And the demand is there, from lower-income youths without deep-pocketed parents, said Lance Ulanoff, a technology columnist and reviews editor at PC Magazine. It’s like a “digital flea market for teens,” he said. “It’s a tiered system of teens. There are those that can get the latest and greatest and those that can’t.” He added: “It might be used, but if it still looks cool they’re willing to go with that.”

A review of listings on Web sites like Craigslist, eBay and MySpace, the social networking site, points to a secondary market of teenagers involved in tech gadget commerce. And sales are not limited to the Web. Many teenagers said they were also selling their old electronics to classmates, in the hallways of high schools and colleges.

Helping to spur the trend is a desire by some teenagers to own the hippest gadgets, as they come to see technology as an extension of themselves.

“It is part of this generation’s DNA,” said Gary Rudman, president of GTR Consulting, a youth-culture market research firm in San Francisco. “This generation is forced to adapt, adopt and advance when it comes to technology. Basically what’s happening is, unlike previous generations that had the luxury of understanding a piece of technology and slowly adopting it, this generation is on a treadmill.”

Henrik Cotran, a 17-year-old high school student from Lexington, Mass., feels the pressure. “People definitely notice if you have old stuff,” he said. “People laugh at you if you have a first-generation iPod. They call it a Ghetto iPod.”

Recently, he found himself with an extra video iPod because his grandmother bought him one for his birthday. So he sold his old one to his best friend for $230, a discount from the $300 retail price at the time. “My friend didn’t have one because he was reluctant to spend the money and he didn’t want to ask his parents,” he said.

Because this teenage-oriented flea market is fairly new, there are a few things that teenagers and their parents need to keep in mind.

If teenagers sell their MP3 players or computers with hundreds of songs they downloaded from the Internet, they may be treading on copyright laws, especially if they keep another copy.

There are also privacy issues when people sell a laptop or any computer that includes personal information. “Whether it’s a cellphone or laptop, your personal information needs to be sanitized or destroyed before it’s passed on because it could potentially come back to harm you or someone you know,” said Robert Johnson, executive director of the National Association for Information Destruction in Phoenix.

Above all, the fact that teenagers may be interacting with strangers in these transactions could be dangerous, so parental supervision is important.

There are several ways that money can be exchanged. Teenagers can meet the buyers and get cash on delivery, or take a check. Sellers can also be paid electronically by using services like PayPal and then ship the item. But users of PayPal must be 18 or older, so parents must be willing to provide a credit card number in most cases.

Because some children will probably not want to pay for shipping, they may be inclined to meet up with strangers who offer them a good price online, Mr. Ulanoff of PC Magazine warned.

GREG STOFT, the 18-year-old who sold his iPod to buy a skateboard, met the buyer at a bakery. “I wouldn’t recommend anyone under age 15 doing that, but I’m a big person,” he said. “No one tries to mess with me.”

Mr. Ulanoff said parents should make sure that their teenagers are not including personal contact information along with their online ads.

A recent search of ads for consumer electronic products on Craigslist from an array of teenagers found a handful that listed their personal phone numbers; one young girl from Missouri included her photograph and her personal e-mail address along with her ad on MySpace.com selling her iPod Nano.

Brittany Rich, a 16-year-old high school student in Boca Raton, Fla., knew better than to put any of her personal information online when she put an ad on eBay last year to sell her broken laptop.

Brittany’s mother, Nancy Rich, said she was aware of her daughter’s intentions to sell the laptop and kept on top of the transaction through the whole process.

“Brittany took the laptop to FedEx Kinko’s to ship it after she sold it online — there was no way she was going to meet anyone,” Ms. Rich said. “I’m involved in everything,” she added. “I don’t mind being nosy. It’s our job as parents.”

Brittany got $380 for the laptop and was able to put that, as well as some of her savings, toward a new laptop that cost $1,000.

Her decision to go into cyberspace for the extra cash was simple, she added. “My parents bought me my old laptop,” she said, “but after I broke it they said, ‘You’re on your own.’ ”
http://www.nytimes.com/2007/02/18/bu...y/18teens.html





IPod’s Groovy Factor
Michel Marriott

WHAT do flying plastic pigs, dancing daisies and robotic Barbie dolls have in common? An iPod.

With more than 90 million players sold worldwide since its introduction in 2001, the iPod has spawned a lucrative accessories industry. At least 3,000 types of iPod extras have received Apple’s blessing — mostly no-nonsense options like cases, earbuds and amplified speaker systems, including the $300 SoundDock line made by Bose.

But another trend is developing, one more playful and not always with Apple’s approval or knowledge.

Call it iSilly, a growing number of products in which fun is emphasized over function, and cute or irreverent often trumps wow. All of these items, some costing as little as $10, have been created to plug into an iPod — or, in many cases, any audio source that has a standard 3.5-millimeter headphone jack.

Last fall, KNG America released an animated robotic D.J. complete with spinning turntables and stereo speakers that flash with blue L.E.D. lights. Called FUNKit, the device, which costs about $100, is designed specifically for the iPod. When a player is attached, it becomes the head and upper body of the D.J. that rocks to the music, spouting phrases like “drop the beat,” as its right arm scratches a faux record.

“People looked and saw the popularity of the iPod and tried to figure out how to capitalize on it, like those scavenger fish that swim under sharks,” said Shelly Hirsch, a toy industry marketing specialist and chief executive of the Beacon Media Group.

Greg Joswiak, vice president of iPod product marketing for Apple, said the growing number of products designed to plug into an iPod helps prove that the iPod has become “a cultural phenomenon.”

“If you look at it from the consumers’ standpoint, they have a consumer electronic product that becomes more valuable over time,” he said. “We’re adding these accessories, adding capabilities.”

Any speaker accessory that attaches to the iPod by way of the proprietary 30-pin connector in the player’s base must be licensed by Apple, he noted. Those that do, including the FUNKit, can usually also permit full control of the iPod through the speaker systems and charge iPods’ batteries.

Those that do not, and are not counted as official iPod accessories, are “less interesting,” Mr. Joswiak said. That judgment has not dissuaded toymakers like Lee Schneider, president of the Commonwealth Toy & Novelty Company, a major maker of plush animals and dolls.

“We look at not only the toy business, but what’s happening in the world, and the trends in the marketplace, from a fashion standpoint, from a technological standpoint,” said Mr. Schneider, surrounded by shelves of battery-powered flora and fauna in his company’s Manhattan showroom. “We then take and see how we can interpret these trends into fun trends that children and young adults would love to have.”

Last year, he said, “iPods were becoming the rave of the world.” Mr. Schneider said that he and his executives had asked themselves a single question: “What can we do to make something that could be utilized with iPod?”

First, he said, the company came up with a name that would tie its prospective line of products to iPod. The result was iPals, which Commonwealth quickly registered and trademarked. Next, the company moved to define the personality of an iPal.

The first iPal, released last year, was a shaggy, plush creature resembling a teardrop-shaped extraterrestrial with stereo speakers for eyes positioned on long, flexible stalks. The shaggy iPal plugs into any audio player with a standard headphone jack, avoiding the need for an Apple license.

Mr. Schneider said the original iPal, which cost about $25, was intended for “tween girls who want to have something cool and fun in their room.”

Then came the Movin’ and Groovin’ line of potted plants, also $25, “probably the best introduction in the history of my company,” Mr. Schneider said. The plants, some wearing sunglasses and others a pink purse over a leafy limb, gyrate to music played through a speaker hidden in the plant’s pot.

There is also a line of dancing snakes (soon to be joined by dancing dragons), both $25, as well as plush speaker systems for children called Smonsters and Plumplers, about $15, and Mini iPals that will cost $10. In the works is a dancing plant as tall as a third grader (“a room décor piece”) for $80.

“I look at this almost like the Lava Lite of the 2000s,” Mr. Schneider said of his creations.

Sharper Image, the retail chain, is featuring a line of fanciful iPod speaker systems. One is a scale model of a lemon-yellow, convertible Volkswagen Beetle. Its speakers are hidden in its wheels, and iPods are intended to “ride” in its back seat. At $100, the Beetle is also a digital alarm clock and FM-AM radio with a wireless remote control and working headlights.

Sharper Image is also offering a $40 teddy bear that flashes tiny lights embedded in its paws and feet when digital music is played through its speaker. A pocket on its belly is strategically positioned to nestle an iPod.

Sharper Image also sells an iPod docking station that creates a rainbow of colored L.E.D. lights that pulsate to the rhythm of music played through it. The stereo systems come in two versions, one for $100 and a similar one with a subwoofer for $150.

Mr. Hirsch, the toy industry marketing expert, said iPods have become such a part of everyday life that — as with a wristwatch — its underlying technology was taken for granted. “It’s almost like magic,” he said.

Among the first to tap into that magic, many in the industry say, was Hasbro’s I-DOG Interactive Music Companion, introduced in fall 2005. At $30, it is a palm-size robotic pooch with an embedded speaker that moves to music played through it when attached to a digital music player. Hasbro also makes a menagerie of I-animals, including pups, cats and fish. This month it added a $20 penguin, called I-CY, that flaps its flippers as its belly glows to music.

Not to be outdone, Mattel, continually updating Barbie, is introducing interactive Chat Divas Barbie dolls for $30. The doll can talk on its cellphone in one hand and sing karaoke with a microphone in the other. The battery-powered karaoke machine doubles as a speaker for a music player, and Barbie moves her head and lips to the music.

MGA Entertainment has taken a different direction. The company has created the i-Bratz i-Petz Piggy, a touch-sensitive plastic piglet ($25) that dances to music played through it. It lights up, turns its head and even flaps its if-pigs-could-fly wings.

And while it may not qualify as a toy, Atech Flash Technology has come up with an accessory that may still provide a smile. It is the Stereo Dock for iPod with Bath Tissue Holder, a toilet-paper dispenser with an iPod dock and speakers. Selling for $100 ($130 with built-in rechargeable battery), it can also be detached from the wall and used as a portable speaker system.

George Yang, the marketing director of Atech, which has offices in Taiwan and Fremont, Calif., said the Apple-licensed product had been well-received at trade shows. “All get a good laugh out of it,” he said. As for Apple, he added, “it’s good P.R. for them.”
http://www.iht.com/articles/2007/02/...ess/ptipod.php





Settlement Lets Apple Use ‘iPhone’
Brad Stone

Apple and Cisco Systems have decided that a name is not worth fighting over.

On Wednesday, the companies settled their dispute over the iPhone trademark. Six weeks ago, Cisco filed a lawsuit in federal court in San Francisco over Apple’s planned use of the name for its much anticipated multimedia device, which combines the features of a mobile phone, an iPod and a BlackBerry.

Cisco claimed that it had owned the trademark since 2000 and was using it for a line of Internet-connected phones.

Wednesday night, in a short, ambiguously worded statement, the companies said they would dismiss all legal action against each other regarding the trademark and that Apple could use the name for its device, which it plans to start selling in June.

In addition, the companies said they would explore ways to make their identically named iPhone products work together “in the areas of security and consumer and enterprise communication.”

Representatives for Apple and Cisco said other terms of the deal would remain confidential. It is not known if Apple made a cash payment to Cisco, but intellectual property lawyers say some sort of payment is typical in these cases. It is also unclear whether Cisco had sold Apple the name iPhone outright and had then secured permission to use it itself.

But the deal appears to give a partial victory to both sides. Apple can begin selling its phone with the name that its strong-willed chief executive, Steven P. Jobs, seemed to prefer.

Cisco can also continue to use the name, and with the promise of interoperability, it might have some of the hype and magic surrounding Apple’s products rub off on its own less prominent offerings.

Hostilities broke out between the two companies last month, when Mr. Jobs announced the music phone at the annual Macworld convention in San Francisco.

Cisco, the networking company based in San Jose, Calif., was using the name to sell phones that can plug into a PC or connect with a wireless hot spot and make free calls over the Internet.

The two companies negotiated intensely over the trademark in early January. Executives had planned to make announcements concurrently at the Consumer Electronics Show in Las Vegas and at Macworld, proclaiming the links between their iPhone products.

After talks broke down and Mr. Jobs announced his iPhone anyway, Cisco filed a lawsuit, saying that Apple’s use of the iPhone name constituted a “willful and malicious” violation of Cisco’s intellectual property. In response, Apple called the lawsuit “silly” and noted publicly that several companies besides Cisco were using the iPhone name.

Cisco’s lawsuit described covert Apple attempts to obtain the rights to the iPhone name. In September 2006, a corporation calling itself Ocean Telecom Services filed an application for the trademark based on earlier filings in Trinidad and Tobago. In its complaint, Cisco asserted that Apple was behind the efforts.

But while they flung legal accusations at each other, both companies faced significant pressure to settle. Apple’s iPhone will be released in June and will be available to customers of the AT&T wireless network, which was formerly known as Cingular Wireless. If Apple had failed to settle with Cisco and subsequently lost the battle in court, it could have been liable for financial penalties for each unit that it sold.

But Cisco also faced a strong incentive to reach a deal.

“Cisco had to provide access to the trademark to Apple if it wanted to achieve the highest value for the name. There was no potential second buyer who would have equaled Apple’s desire for the iPhone mark,” said Alan Fisch, an intellectual-property lawyer at Kaye Scholer in Washington.

He added that Cisco also faced the reality that consumers associated the name more with Apple.

“The iPhone name has been informally synonymous with an anticipated Apple phone for years prior to the product’s formal announcement,” he said.
http://www.iht.com/articles/2007/02/...-0222apple.php





Cisco-Apple Truce Murky on Details

Cisco-Apple truce over 'iPhone' murky on details of collaboration
Jordan Robertson

The short-lived legal battle between Cisco Systems Inc. and Apple Inc. over the "iPhone" name was only on the surface a trademark-infringement dispute involving identically named multimedia telephones.

Cisco has maintained since the start of the squabble six weeks ago that the dispute was not about money, even though it stood to profit handsomely from any settlement.

Instead, the networking gear maker said it was trying to pressure Apple to break its attachment to closed, proprietary systems and begin collaborating with Cisco on imaginative future products that can communicate with each other.

But industry analysts said Thursday the settlement between the Silicon Valley tech giants does not mean that Apple will suddenly open up its most lucrative technologies, particularly the iTunes library that has helped catapult Apple into the top ranks of music retailers worldwide.

The more likely scenario, they said, is that Cisco and Apple could partner in the near-term on lower-profile projects that leverage the respective strengths of the world's largest networking equipment company and the new darling of digital entertainment.

Some of those efforts, they said, could include integrating Cisco's Voice over Internet Protocol, or VoIP, technology into Apple's iPhones, which are currently designed to operate only over the cellular network; improving the ability of Apple computers to work securely with wireless home routers from Cisco's Linksys division; or generally developing ways for both companies' products to work seamlessly with each other.

Analysts cautioned against expecting any type of major concessions from Apple concerning its proprietary technology, citing the vague joint settlement statement from the companies that raised more questions than it answered.

"As far as concessions go, from Apple's point of view, is there a downside to making their products work better with Cisco's networking gear? I don't see a downside for them," said Charles Golvin, principal analyst with Forrester Research Inc. "If anything it makes their products that much more attractive."

Gene Munster, senior research analyst with investment bank Piper Jaffray & Co., said talk of collaboration is "noble language" but he is not expecting any blockbuster joint products to emerge from the partnership.

"Apple wanted that to be the impression because they get a lot of pressure for being closed," he said, adding that he suspects money played a more crucial role in the negotiations than either company let on. He estimated that Apple paid Cisco between $25 million and $50 million for rights to the name.

Both companies have refused to comment on terms of the deal and are staying tightlipped about what future products might come from the settlement, which allows Cisco and Apple to both use the iPhone name worldwide to sell their phones.

They would only say they are going to explore opportunities for "interoperability" in the areas of security, consumer and business communications.

Cisco sued Apple last month in San Francisco federal court claiming that Apple's use of the iPhone name violated a trademark Cisco has held since 2000 and is using on a line of Linksys phones that make free long-distance calls over the Internet using VoIP technology.

Apple had argued it was entitled to use the name because its sleek new iPhone operates over the cellular network.

The two sides said late Wednesday that have agreed to drop any pending litigation against each other over the trademark as part of the deal.

Analysts said Thursday the truce was likely part of a longer-term strategy by both companies to bolster their competitive positions in the fight to deliver digital content _ particularly video _ directly into consumers' homes.

Cisco, which makes the routers and switches that direct data over computer networks, is profiting from the demand for video as service providers spend lavishly on equipment upgrades to accommodate the need for more bandwidth.

Analysts said the deal highlights Cisco's desire to partner with companies such as Apple that are pumping more video into the home and driving up the need for more networking gear.

Last month, Apple unveiled its new Apple TV video box, which allows users to watch downloaded movies stored on their computers on their home television sets. Industry observers suspect Apple could eventually play a much larger role in the delivery of television and movies to the home.

"This is more a strategic move by Cisco to continue to strengthen its core business _ and it was good for them to have the moxie or the wherewithal to have the iPhone name to use as a negotiating tool," said Kurt Scherf, vice president and principal analyst with market research firm Parks Associates.

The dustup over Apple's willingness to work with outside companies comes amid intense criticism, particularly in Europe, over the inability of its iTunes software to work with other portable media devices besides the ubiquitous iPod.

Earlier this month, Apple Chief Executive Steve Jobs urged the world's major music companies to abolish the digital rights management, or DRM, protections that he said were preventing Apple from selling music that would play on any device.

Danielle Levitas, a senior analyst at market researcher IDC, said she doesn't expect Apple to open up iTunes any time soon. She said the company's partnership with Cisco is more about Apple preparing to tackle the so-called "connected home" market where digital entertainment is delivered through a variety of devices.

"I don't think they're opening up the kimono, but they're hedging their bets for what they need to do for video and the connected home," she said. "They had to do this to keep the name. They had to do this to not drag out the lawsuit so they could use the name from day one. Eventually Apple will have to open up a little bit, and Cisco would definitely be the first to benefit. But it ain't going to happen in the next 12 to 18 months."
http://www.cbsnews.com/stories/2007/...8NF3B6O1.shtml





Quantum to Sue Apple Over The iPhone?
Priyanka Pradhan

Close on the heels of the trademark settlement with Cisco, Apple may soon find itself in more trouble, over the iPhone. UK based touch-sensor manufacturer, Quantum Research, has threatened to sue Apple if it finds that the company has infringed on its touch screen patent. Quantum is currently examining the phone for the same.

According to reports, Duncan Bryan, licensing director at Quantum Research said that the description of the iPhone suggests it uses a rear-surface touch screen, and has proximity sensing which can tell if it is held to the ear, which is a Quantum Research capability. He added that if Apple has used the charge transfer technology to give the iPhone that capability, then Apple could be infringing the firm's patent.

This is the second attempt by Quantum, to warn Apple about infringing on its patent. The company had filed a case against Apple, for applying its patented charge transfer technology in the wheel control in iPod Nano. The first patent-infringement lawsuit, filed in December 2005 is still under process. Apple has denied those charges and has filed counterclaims against Quantum.
http://www.tech2.com/india/news/mobi...-iphone/4380/0





Cisco Faces iPhone Trademark Challenge in Canada
Dawn Kawamoto

A Canadian telecommunications company has sent Cisco Systems a letter of warning alleging the networking giant is stepping on its use of the iPhone brand.

The issue could be particularly sticky for Cisco because earlier this month it filed its own iPhone trademark infringement lawsuit against Apple in U.S. federal court. In the Canadian dispute with Comwave Telecom, Cisco is more circumspect.

"We recently became aware of Comwave and we're investigating the issue thoroughly," said Cisco spokesman John Noh.

Comwave, the second largest VoIP service in Canada, has been using the iPhone name for the service since 2004.

"Our legal department has put Cisco on notice," said Yuval Barzakay, president of Toronto-based Comwave. "We will see how they react and then gauge our next action."

Comwave does not hold a registered trademark for iPhone, but has filed an application for one. The Canadian Intellectual Property Office bases its trademark awards on such issues as who was first in using the brand name in Canada or in applying to register the name, say experts in the trademark registration field.

"There has been a Comwave iPhone for years, and, (according to) Canadian law on first use, iPhone is ours," Barzakay said.

Cisco began shipping iPhone VoIP devices worldwide last year and accelerated its global marketing campaign when it introduced two new iPhone products last month, Noh said. Previously, iPhone was sold by Infogear, which Cisco acquired in 2000. It is not clear whether the Cisco's iPhone products were only sold in the U.S., or in Canada, as well.

According to records with the Canadian Intellectual Property Office, Cisco, via Infogear, had filed an application to obtain a trademark for the iPhone name in 1998, but abandoned those efforts in mid-2003.

In 2004, Apple filed an application for use of the name iPhone with the Canadian Intellectual Property Office. And within several months, Comwave filed a motion to oppose that application, Barzakay said.

Comwave, which filed its own application to register the trademark in 2005, alleges it has had the longest use of the name--over Apple and Cisco.

Canadian trademark experts note it will likely take another two to three years before the Canadian Intellectual Property Office awards the trademark.

"I find it peculiar that Apple would launch a flagship product without securing its own trademark first," Barzakay said. "They certainly could have used a lot of other names."

In its U.S. lawsuit, Cisco alleges Apple debuted its iPhone mobile device, even though it had warned the computer maker it would infringe on Cisco's trademark for its VoIP phones. Apple is planning to ship the iPhones in June.

Apple was not immediately available for comment.
http://news.com.com/Cisco+faces+iPho...3-6153865.html





MP3 Patents in Upheaval After Verdict
Saul Hansell

Microsoft was ordered by a federal jury yesterday to pay $1.52 billion in a patent dispute over the MP3 format, the technology at the heart of the digital music boom. If upheld on appeal, it would be the largest patent judgment on record.

The ruling, in Federal District Court in San Diego, was a victory for Alcatel-Lucent, the big networking equipment company. Its forebears include Bell Laboratories, which was involved in the development of MP3 almost two decades ago.

At issue is the way the Windows Media Player software from Microsoft plays audio files using MP3, the most common method of distributing music on the Internet. If the ruling stands, Apple and hundreds of other companies that make products that play MP3 files, including portable players, computers and software, could also face demands to pay royalties to Alcatel.

Microsoft and others have licensed MP3 — not from Alcatel-Lucent, but from a consortium led by the Fraunhofer Institute, a large German research organization that was involved, along with the French electronics company Thomson and Bell Labs, in the format’s development.

The current case turns on two patents that Alcatel claims were developed by Bell Labs before it joined with Fraunhofer to develop MP3.

“Intellectual property is a core asset of the company,” said Joan Campion, a spokeswoman for Alcatel-Lucent. “We will continue to protect and defend that asset.”

Thomas W. Burt, the deputy general counsel of Microsoft, said the company would most likely petition the judge in the San Diego case, Rudi M. Brewster, to set aside or reduce the judgment. If she does not, Microsoft will probably take the case to the federal appeals court in Washington, which hears patent cases.

Microsoft argued that one patent in question did not apply to its MP3 software and that the other was included in the Fraunhofer software that it paid to license.

Moreover, it argued that the damages sought by Alcatel were unreasonably high, pointing out that it paid Thomson, which represented the consortium in its dealings over the patent, a flat $16 million fee for the rights to the MP3 software.

“We think this is just plain wrong,” Mr. Burt said. “They told the jury to measure damages, not on the value to Microsoft of one of the 10,000 features in Windows, but on the value of the entire computer.”

Alcatel argued that the damages should be based on a royalty of 0.5 percent of the total value of Windows computers sold.

John M. Desmarais, a partner with Kirkland & Ellis who represented Alcatel, said the proposed damages were consistent with patent law. He said it was not appropriate to compare them with the $16 million Microsoft paid Thomson because the rights to the Bell Labs patents were far more valuable.

“It’s like going to the supermarket and paying $1 for a bar of soap,” he said. “That lets you use the soap. We were offering the equivalent of the right to make soap any way they wanted.”

The jury supported Alcatel’s arguments on every count except one. It deadlocked on the question of whether Microsoft willfully infringed on the Bell Labs patents. If the jury had found that it did, Microsoft would have had to pay triple damages.

“Microsoft has been and to some degree continues to be at a competitive disadvantage, as it did not file for patents for many, many, many years,” said Jack Russo, a patent lawyer with Russo & Hale in Palo Alto, Calif.

That makes it harder, he said, to work out deals with other large companies in which they exchange the rights to each other’s patents.

Large companies like AT&T and I.B.M. “have huge patent portfolios and that represents large and unpredictable risks for companies like Microsoft,” he said.

The judgment is part of litigation by Alcatel to enforce claims related to Bell Labs patents. The case was initially brought against Dell and Gateway, which make computers using Microsoft software. Other trials are pending for technology related to speech recognition, user interfaces and video processing.

Microsoft has countered with a claim, filed with the International Trade Commission, that Alcatel is violating its patents related to messaging technology.

The largest award for a patent infringement case to date was the $909 million that Kodak was ordered to pay in 1990 to Polaroid for violating patents related to instant cameras. That case also forced Kodak to exit the instant photography market and recall its cameras.

Mr. Burt said the appeals process might take another year or two. He said he did not expect that the courts would force Microsoft to remove the MP3 functions from Windows.

Ms. Campion of Alcatel declined to comment on whether that company would pursue similar claims against makers of MP3 players, like Apple.

An Apple spokesman declined to comment. A Thomson spokesman did not return calls or e-mail messages requesting comment.

If the judgment is affirmed, the damages payment would make only a modest dent in Microsoft’s cash hoard, which totaled almost $29 billion at the end of last year.

News of the ruling surfaced just before the regular close. Microsoft’s shares closed at $29.39, up 4 cents, and fell 11 cents after hours.

Alcatel-Lucent American depository receipts, each representing one ordinary share, rose 7 cents, to $13.14, in regular trading, and 34 cents after hours.
http://www.nytimes.com/2007/02/23/te.../23patent.html





Linus Fires Latest Shot in GNOME Wars
Linux.com staff

Some bad blood between Linus Torvalds and GNOME developers is flaring up again. Previously, Torvalds has said that Linux users should switch to KDE instead of GNOME because of the GNOME team's "users are idiots" mentality. Now he has "put his money where his mouth is" by submitting patches to GNOME in order to have it behave as he likes.

This week, on the Linux Foundation's (formerly OSDL) Desktop Architects mailing list, the two sides are going mano a mano. On Monday, Marcos Pérez López replied in Spanish to an earlier message from Torvalds in which Torvalds lashed out at the GNOME crew, claiming GNOME developers believed their users were idiots. López's reply defending GNOME was in Spanish, and he closed it by saying:

¿Quién es el NAZI?
Who is the Nazi?

Nada más, esto para LINUS para que piense. Nothing more, this is for Linus to think about.

LINUS, NO SABES LEER ESPAÑOL, ¿A VER SI VAS A SER IDIOTA TU TAMBIÉN? Linus, you don't know how to read Spanish, so are you an idiot too?

Godwin's Law was quickly invoked by Fernando Herrera, but that didn't stop the debate. Torvalds took the Spanish in stride, and continued the argument by saying it was good for GNOME to be easy to use, but that "'ONLY being easy to use' is bad." He also noted that "GNOME people seem to think that once you 'got into it,' you never want to do anything more. Not true."

Christian F.K. Schaller then threw down the gauntlet, urging Torvalds to action with:

If you are up for a challenge, why don't you use GNOME for a month then come and do a talk about your experience at this years GUADEC in England? Could maybe be a good way to start a constructive dialog instead of this useless mudslinging?

This morning, Torvalds responded to the challenge, though not in the manner Schaller suggested. He submitted patches to GNOME to make it behave as he wants, then told the mailing list:

I've sent out patches. The code is actually _cleaner_ after my patches, and the end result is more capable. We'll see what happens.

THAT is constructive.

What I find unconstructive is how the GNOME people always make *excuses*. It took me a few hours to actually do the patches. It wasn't that hard. So why didn't I do it years ago?

I'll tell you why: because GNOME apologists don't say "please send us patches". No. They basically make it clear that they aren't even *interested* in fixing things, because their dear old Mum isn't interested in the feature.

Do you think that's "constructive"?

So let's see what happens to my patches. I guarantee you that they actually improve the code (not just add a feature). I also guarantee that they actually make things *more* logical rather than less (with my patches, double-clicking on the title bar isn't a special event: it's configurable along with right- and middle-clicking, and with the exact same syntax for all).

But why, oh, why, have GNOME people not just said "please fix it then"?

Instead, I _still_ (now after I sent out the patch) hear more of your kvetching about how you actually do everything right, and it's somehow *my* fault that I find things limiting.

Here's a damn big clue: the reason I find GNOME limiting is BECAUSE IT IS.

Now the question is, will people take the patches, or will they keep their heads up their arses and claim that configurability is bad, even when it makes things more logical, and code more readable.

Welcome to wonderful, wacky, never-dull world of free and open source software, where in spite of all the posturing and debate, the answer is always best couched in code.
http://applications.linux.com/articl.../02/16/1937237





In a Supreme Court Case, Microsoft is Getting Support from its Rivals

U.S. software makers and Web site operators find themselves in an unusual position this week: rooting for Microsoft.

Companies that normally focus on thwarting the world's largest software company stand to benefit if it defeats AT&T in a U.S. Supreme Court case that may give software makers new protections from patent lawsuits on exported products.

The case may provide an opportunity for the court to elaborate on its emerging view under Chief Justice John Roberts that patent holders have too much power to bar use of their inventions and extract damages from infringers.

A lower court specializing in patent cases sided with AT&T, the largest U.S. phone company; Microsoft's appeal will be argued Wednesday.

"For the software industry, it's a hugely important case because it effectively doubles or triples the liability of developers who write software in the United States, like Microsoft," says John Duffy, a professor of patent law at George Washington University in Washington. The court will rule by July.

Microsoft is seeking to limit what it must pay to use AT&T's patented technology in the Windows computer operating system. The key issue is whether U.S. patent law, which covers Windows on domestic computers, extends to copies of the software made abroad and installed on computers there.

Oracle, Red Hat and Sun Microsystems are among a group of 60 companies including Microsoft that are lobbying Congress for an overhaul of patent law that would include new limits on potential damages for overseas sales of infringing products.

Meanwhile, Yahoo, Intel and Amazon.com have joined Microsoft in asking the Supreme Court to overturn the decision by the U.S. Court of Appeals.

The companies argue that the appellate ruling encourages companies to insulate themselves from liability by shifting their software-writing teams overseas. Yahoo, owner of the most visited U.S. Web site, warns that the lower- court ruling might prompt foreign countries to retaliate by extending the scope of their own patent laws to cover U.S. activity.

"This court should be careful to avoid any ruling that could launch such a process of escalation," Yahoo, based in Sunnyvale, California, said in a filing.

AT&T, backed by patent-holders including Royal Philips Electronics and the University of California system, says Microsoft's position would shield software makers to a far greater extent than Congress intended.

Both Microsoft and AT&T have hired high-powered lawyers for their fight. Ted Olson, 66, a former U.S. solicitor general under President George W. Bush, is representing Microsoft, and a former Clinton administration solicitor general, Seth Waxman, 55, will represent AT&T.

The Roberts court has previously expressed skepticism about patent rights in a series of cases that cut across ideological lines. In a November argument in a case involving adjustable gas pedals, the justices repeatedly slammed a test used by the appellate court to limit patent challenges.

Justice Antonin Scalia called the test "gobbledygook," while Roberts said it was "worse than meaningless." Justice Stephen Breyer said he had read the briefs in the case "15 or 20 times" and still did not understand one aspect of the test.

Then last month, the court ruled 8-1 in a case involving Genentech and MedImmune that rivals could challenge a patent even if they were paying royalties to sell their version of the invention.

"The way they've been trending the last few years is removing the power from the patents," said a patent lawyer, Erik Puknys of Finnegan Henderson in Palo Alto, California.

A decision issued in June hinted at divisions among the justices on how far to restrict patent rights. Ruling in a case involving eBay, the court said that companies found to have infringed a rival's patent did not necessarily have to change their products.

Although the core of that ruling was unanimous, Roberts and two other justices said in a concurring opinion that judges historically had barred use of a disputed invention "in the vast majority of cases."

Four other justices led by Anthony Kennedy took a different tack, writing separately to say that often a product ban was not necessary and damages were sufficient. Kennedy also wrote that an increasing number of companies were seeking patents as a means of extracting "exorbitant" licensing fees rather than to sell products.

Roberts will not participate in the case, because he owns Microsoft stock. The rest of the justices will scrutinize a 1984 law aimed at preventing companies from circumventing U.S. patent rights by shipping components overseas.
http://www.iht.com/articles/2007/02/...money/msft.php





A Software Maker Goes Up Against Microsoft
Steve Lohr

VMware, a young Silicon Valley company, is the early leader in a fast-growing market for what is called virtual-machine software. And that puts it on a collision course with Microsoft, the industry’s Goliath.

A virtual machine essentially mimics a computer so that several copies of an operating system — say, Windows or Linux or both — can run on one physical machine. It allows computing chores to be done on fewer computers, using less electricity and taking up less space, promising a way to control costs at corporate data centers straining to keep up with the ever-increasing demands of the Internet age.

It is also a product that occupies strategic ground in computing, as a layer of code that resides between a computer’s hardware and the operating system, usurping some tasks, and potentially undermining the importance of the operating system.

In a meeting with corporate customers in New York last month, Steven A. Ballmer, Microsoft’s chief executive, said, “Everybody in the operating system business wants to be the guy on the bottom,” the software that controls the hardware. And he vowed that Microsoft, whose Windows operating systems are the main source of its corporate wealth and market power, would “compete very aggressively with VMware.”

When quizzed on Microsoft’s plans, Mr. Ballmer replied, “Our view is that virtualization is something that should be built into the operating system.”

Bundling new technology into Windows has long been the Microsoft game plan. The most storied case came a decade ago when Microsoft overcame the challenge posed by another Silicon Valley highflier, Netscape, offering another crucial layer of software, the Internet browser. Microsoft feared a competitor’s Web browser, running on top of the operating system, could reduce the power of Windows.

“There are certainly some analogies here to what Microsoft did with Netscape,” said Mendel Rosenblum, a founder of VMware and its chief scientist.

The tactics Microsoft used in the browser battle, of course, led to a host of antitrust troubles for the big software maker in the United States and Europe.

This time, in the market for virtual-machine software, Microsoft is more restrained. Bowing to customer requests, Microsoft began more than a year ago to change its software licenses so its products could run in virtual machines like VMware offerings.

But in recent months, according to VMware, Microsoft has introduced new restrictions on how Microsoft products can be used in virtual machines in new ways, beyond simply dividing a single physical computer into several virtual ones.

This next wave of virtual technology, analysts say, includes software that lets virtual machines move freely across many physical machines, juggling computing chores, so that applications do not crash and Web response times are faster. Another promising new ability is running desktop personal computers as virtual-machine software, hosted and managed securely from a data center.

VMware, however, points to license changes on Microsoft software that it says limit the ability to move virtual-machine software around data centers to automate the management of computing work. A white paper detailing VMware’s concerns will be posted Monday on its Web site (www.vmware.com), the company said.

“Microsoft is looking for any way it can to gain the upper hand,” said Diane Greene, the president of VMware.

Yet VMware is making no antitrust claims against Microsoft, and legal experts question whether the friction between the companies is anything more than two rivals taking different paths to an emerging market.

“This seems to be a far more subtle, informed and polished form of competitive aggression than we’ve seen from Microsoft in the past,” said Andrew I. Gavil, a law professor at Howard University. “And Microsoft has no obligation to facilitate a competitor.”

In the past, said Mike Neil, general manager of virtualization strategy at Microsoft, customers paid a license fee when Windows was installed on a physical machine. But he said virtual-machine software breaks the tight link between the operating system and the hardware, raising the possibility that customers could be using Windows more but not paying for it. So now, he said, the license fee is based on when a copy of Windows is used, whether in a virtual or physical machine.

The license changes, Mr. Neil added, were not designed as a competitive tool. And he sees no evidence of any anticompetitive impact. “Look at VMware’s financial success and you have to ask, How disadvantaged are they really?” he observed.

VMware is certainly thriving these days. Its sales reached $709 million in 2006, nearly double the previous year’s figure. In the fourth quarter, revenue was $232 million, growing 100 percent from the year-earlier quarter.

VMware was founded in 1998 by Mr. Rosenblum, an operating-systems expert and an associate professor at Stanford University; Ms. Greene, a veteran of Silicon Graphics, Tandem, Sybase and a couple of start-ups, who is also Mr. Rosenblum’s wife; and three other computer scientists, Scott Devine, Edouard Bugnion and Edward Wang.

Virtual-machine software dates to the 1960s, when I.B.M. used the technology to coax greater performance from costly mainframes. The achievement of Mr. Rosenblum and his team of Stanford-trained researchers was to develop virtual-machine software that worked, fast and reliably, on today’s lower-cost machines powered by microchips made by Intel and Advanced Micro Devices.

By late 2003, VMware was profitable and growing strongly, and its payroll was approaching 400 people. Its future would depend on keeping its talented team of computer scientists in place, and Google and others were dangling offers. So VMware agreed to sell itself for $635 million in cash to EMC, a leader in data storage systems that was expanding into software. VMware had talked to other companies including I.B.M. and Microsoft. But EMC, not being a major software company, offered VMware more independence.

This month, EMC said it would give VMware an added measure of independence with a separate stock listing and its own shares to help retain its current work force of more than 2,500, and lure new talent. EMC will sell 10 percent of VMware in an initial public offering in the summer that analysts say is likely to value the company at 10 times what EMC paid for it just three years ago.

VMware’s growth is explained by the experience of customers like the International Truck and Engine Corporation, a producer of diesel engines, trucks and school buses. A few years ago, Barry Naber, a technology manager at International Truck, the operating company of Navistar International, began looking for ways to curb the growth of server computers in its data center.

Mr. Naber opted for VMware virtual-machine software, and today the company runs 230 applications, including expense, accounting, training and Web programs on 18 computers in its computer center in suburban Chicago. He estimates the savings for each virtual machine at $7,500 in hardware and maintenance costs avoided, or about $1.7 million.

Mr. Naber also looked at Microsoft’s virtualization offering, but in tests found it was far slower and less reliable than VMware. “We’re entrenched with VMware for now,” he said.

One thing that Microsoft has lacked is a hypervisor, the lowest level of software that rests on the hardware and partitions the computer so it can cleanly and efficiently run several virtual machines. Microsoft is developing a Windows hypervisor code-named Viridian. It will be tailored for the next version of the Windows server operating system, called Longhorn, scheduled to ship by the end of 2007. Viridian will be ready shortly after that. “Virtualization, frankly, is a feature,” Mr. Neil, the Microsoft manager, said. “It’s a great operating system feature.”

Microsoft has built up its virtual-machine team in the last few years with internal hiring and a couple of small acquisitions. And having identified virtual software technology as a core ingredient to its operating system, Microsoft promises to become a daunting competitor eventually.

Yet today, VMware holds an estimated 80 percent of the market for virtual-machine software that runs on computers powered by industry-standard Intel and A.M.D. microprocessors. “The market could change depending on what Microsoft does down the road, but VMware is the 800-pound gorilla of virtualization,” said John Humphreys, an analyst at IDC, a research firm.

In the long term, VMware will also face competition from start-ups in the virtual-machine software market like Virtual Iron and XenSource. The start-ups note that only 5 to 7 percent of computers in data centers use virtual software. They see a market that is just beginning to take off with plenty of opportunity, if they can match VMware’s technology and charge less.

Virtual Iron and XenSource take opposing views on Microsoft’s recent moves. “Microsoft sees VMware coming between them and their customers,” said John Thibault, president of Virtual Iron. “So Microsoft is manipulating its license terms to see if it can freeze the market and slow down the trend.”

For its part, XenSource signed a deal last year with Microsoft to collaborate so that XenSource’s software will work well with the virtualization technology Microsoft is developing for the Windows Longhorn server. “We set out to partner with Microsoft,” said Peter Levine, president of XenSource, “and VMware chose to compete with Microsoft.”

VMware, according to Microsoft, should see the wisdom of the path XenSource chose. In his meeting with corporate customers recently, Mr. Ballmer sketched out a future in which Microsoft would put fundamental virtual-machine software in its operating systems, and “VMware builds on top.”

VMware is leery of such an accommodation, fearing it would prove to be a one-sided bargain. “We will not sign agreements that give Microsoft control of this layer,” Ms. Greene said.
http://www.nytimes.com/2007/02/24/te...gy/24soft.html





Microsoft's Amusing Standards Stance
Håkon Wium Lie

When Microsoft talks standards, I listen. Last week was good for listening.

Two of the company's general managers published an open letter on document formats titled Interoperability, Choice and Open XML. In the letter, they argue that Microsoft is doing all the right things with standards and that IBM is not playing by the rules.

The letter is about an ongoing battle between two Extensible Markup Language-based document formats. IBM and others have supported the OpenDocument format, or ODF, from its inception in OpenOffice to its current International Organization for Standardization-accepted status.

Microsoft is trying to give its own Office Open XML (OOXML) the same stamp of approval by taking a shortcut through the "fast track" offered by the European standards body Ecma International into the ISO.

The conflict has provided prime entertainment for document geeks, and the letter adds to the amusement.

Jean Paoli and Tom Robertson share a tear-jerking story on how Microsoft has "stepped up efforts" and "listened to customers." Microsoft "congratulates Ecma" for producing a 6,000-page specification that will "spark an explosion of innovation." The enemy, on the other hand, is using the "standards process to limit choice in the marketplace for ulterior commercial motives." Microsoft has the nerve to criticize competitors for having commercial motives?
While it's healthy to have competition between different standards, it's rarely productive to have competing standards within an organization.

Further, the letter claims that "ODF is closely tied to OpenOffice and related products" (bad!) while OOXML "reflects the rich set of capabilities in Office 2007" (good!). A more even-handed sentence might read: ODF is an XML-based dump of the internal data structures of OpenOffice, while OOXML is an XML-based dump of the internal data structures of Microsoft Office.

"Choice" is a prominent word in the letter. The authors argue that consumers want several standards from which to choose. I don't think so. Consumers never wanted the choice between VHS and Beta, and mobile telephony in the United States was hindered by customers having to choose between competing standards.

Choice soon turns to frustration when your rented video doesn't fit in the slot, or your phone doesn't connect. People want to choose products based on price and performance, not on underlying equivalent standards.

According to the letter, governments have also been asking Ecma to "establish choice." Which countries? Is it Kazakhstan, by any chance? Kazakhstan recently joined the relevant ISO group. In the past, consultants paid by Microsoft have joined standardization groups and have become sympathetic voices. Are they buying countries this time?

In this conflict, ISO must answer a difficult question: is there room for both ODF and OOXML inside ISO? I'm not a fan of either format, but ISO should be concerned about the closeness of the two formats. They are similar in function, solving the same problems and using XML as the syntactic foundation. While it's healthy to have competition between different standards, it's rarely productive to have competing standards within an organization.

It can be argued that, by introducing a competing standard, one risks jeopardizing both standards. Around 1990, the SGML (Standard Generalized Markup Language) and ODA (Open Document Architecture) standards were competitors. Both of them were ISO standards, and I believe this was counterproductive for everyone involved. For example, SGML added useless features just to compete with ODA. Microsoft is not to blame for this, as they were not interested in standards in 1990. In 1997, however, they were.

Less than a year after CSS (Cascading Style Sheets) became a W3C Recommendation, Microsoft co-submitted the competing XSL (Extensible Stylesheet Language) to the World Wide Web Consortium. (One of the authors of that submission was Jean Paoli. It is unlikely that he did much of the technical work on XSL, and he was probably listed for political reasons. Similarly, he was listed as an editor of the XML specification after Microsoft made some phone calls.)

As a result of being in the same organization at the same time, both CSS and XSL suffered. One can speculate that if both CSS and XSL had failed, Microsoft would have offered a proprietary style sheet language, perhaps based on its own patents.

In 2006, a year or so after ODF entered the fray, Microsoft submitted OOXML to the standardization process. Are we seeing a pattern here? Is Microsoft undermining standards by submitting them? Could it be that it wants both ODF and OOXML to fail?

If both specifications fail, the most likely result is that the world continues to use Microsoft's proprietary "doc," "xls" and "ppt" formats. This is consistent with Microsoft's attitude in other areas in which the company is pushing closed formats. For example, the MSN Messenger protocol is not public.

As mentioned above, I'm no fan of either specification. Both are basically memory dumps with angle brackets around them. If forced to choose one, I'd pick the 700-page specification (ODF) over the 6,000-page specification (OOXML). But I think there is a better way.

It is possible to build a new format on top of the universally understood HTML and CSS. Additional semantics (say, formulas in spreadsheets) can be encoded as attributes, as do microformats, and CSS 3 offers advanced features for printing (e.g., footnotes and header and footers).

To show that it's possible, Bert Bos and I published a book using HTML and CSS. One significant benefit of this approach is that documents can be viewed in common Web browsers. There's a billion of them out there.

One fun thing to do in Web browsers is to check how well documents conform to standards. For example, you can pass the URL of Microsoft's letter to W3C's validator. Doing so reveals that the letter is not written according to the HTML specification. The validator finds 33 errors in the most lenient mode. (One of the errors is the use of the "layer" element. (The "layer" element?!)

Microsoft--please--if you think standards are so important, why not start using them?
http://news.com.com/Microsofts+amusi...3-6161285.html





Mad as hell

“Oh Dell, Why Must You Disappoint Me So?” or “Why I Won’t Buy Dell Right Now”
Derek Buranen

Even though Dell Digg is full of Linux requests, Dell utterly disappoints me in its Linux support.

Let’s give them the benefit of the doubt. With all these Linux cries from customers, maybe Dell is finally changing their tune to us who use open source software on a day to day basis. First things first, lets take the new n-series D420 and lets compare that with a windows-loaded D420. Enter doubt. Upon first opening these systems, we see that the n-series is $1252 and the windows-loaded laptop comes in at $1199. Again, let’s keep a cool head. Maybe they had to give you an upgraded video card or better wireless that has some superb Linux driver. Scroll down. This is where you start to get frustrated.

Dell’s computer with no operating system is $53 more expensive than one loaded with Vista!

This is crap! This is where anyone commenting on Dell’s Desktop Linux offering at the moment should be in outraged and call them out on this. I can see Microsoft using this to say that no one buys Linux PCs when they’re available. Again, crap! I’m going to go out on a limb and say that anyone looking to get Linux on a PC is smart enough to know that you can erase windows. And at $53 dollars more, where is the advantage of buying a PC without it?

I read this on Dell’s Linux Blog which is syndicated on Planet Fedora?! Please Dell Blog, don’t tell us about your smashing Linux deals when you know we can buy a Windows PC from you for cheaper. Why would you want to rip off the community. Furthermore, I’m buying system76.com until these practices change and would urge anyone else looking for a Linux PC to do the same. Dell could win me back. I’m a sucker for cheap prices and don’t care about support.

To sum, if you buy Dell, you support Microsoft. Even if you don’t want to. (Unless you’re a moron who wants to spend $53 for nothing on n-series) Can you really return it? That’s not good enough. I don’t want to buy it. I don’t want to support them.
http://buranen.info/?p=77





Skype Asks FCC to Open up Cellular Networks
Nate Anderson

Skype yesterday petitioned the FCC to lay the smack down on wireless phone carriers who "limit subscribers' right to run software communications applications of their choosing" (read: Skype software). Skype wants the agency to more stringently apply the famous 1968 Carterfone decision that allowed consumers to hook any device up to the phone network, so long as it did not harm the network. In Skype's eyes, that means allowing any software or applications to run on any devices that access the network.

The reason for Skype's interest in the issue is obvious: they want to force network operators to allow Skype-enabled calling across their networks, something currently prohibited on wireless data plans. In its filing, Skype argues that this capability would offer "tremendous new sources of price competition provided by entities such as Skype," and that's exactly why wireless operators will fight the plan tooth and nail.

Something similar has happened before. In the early days of the wired telephone network, the phone company provided not only network service, but also the equipment, and routinely took firms to court if they sold products meant to be attached to consumer telephones (which were still owned by the phone company). In 1956, a court ruled that a device called the Hush-a-Phone was allowed to be fitted onto the telephone so long as it was "privately beneficial without being publicly detrimental."

In 1968, the FCC endorsed this principle in the Carterfone case. The Carterfone was an early attempt at building a wireless phone. It used a two-way radio and an acoustic coupler to patch a person's voice into the telephone network, and the FCC again ruled that this was allowed so long as the network itself was not harmed. The principle is still in place today, and wired phone networks now stop at a small termination box usually located on the outside of homes; anything past that point is the homeowner's responsibility, but phones, modems, and faxes can all be hooked up to the network without requiring phone company permission.

This principle currently affects the wired telephone network, the cable TV network (any set-top box can be hooked up to any cable system, at least in theory, once the "integration ban" goes into effect later this year), and the data networks offered by both services (DSL and cable, which can be hooked up to any device inside the home). Wireless phone networks are a different story. Defenders of the status quo argue that this isn't a problem, since plenty of competition already exists in the market, and the invisible hand of the market will inevitably provide that which consumers want better than any government regulation can do.

Unfortunately, the "invisible hand" has been a little too invisble here, and no operator actually offers a wide-open network. Skype thinks a smidgen of government regulation could actually help out quite a bit, and they cite Dr. Tim Wu's recent paper on wireless network neutrality for support. Skype (and Wu's paper) point out the various ways that the wireless phone companies block consumer choice: crippling features on phones, locking handsets to operators, limiting consumers' ability to install third-party applications, and limiting the terms of service with bandwidth caps and restrictions on what content can be accessed through the network (Skype calls are forbidden, for instance).

Skype essentially wants to turn the wireless phone companies into just another network of the kind currently operated on the ground. This would require carriers to allow any phone to be used on their networks, and for any application. Users would simply purchase a voice or data plan (though these could easily converge into a data plan if VoIP calling is used) and then use the device of their choice to access the network of their choice. Verizon, Cingular, et al. hate this and would love to keep crippling WiFi and Bluetooth access on their phones in order to keep traffic flowing through their network, using their (high-priced) services.

Recognizing that its proposal would pose some thorny technical problems, Skype "approaches these issues with humility, recognizing that application-layer competition depends in part upon the 3G deployment efforts of wireless carriers." They suggest the creation of an FCC-guided forum to handle technical specifications, one that would operate transparently and would involve all stakeholders in the issue. The forum, in Skype's view, would ensure that "no entity can enforce techniques such as blocking, locking, or certification requirements that have the intention of preventing consumers from modifying or installing software unless it is reasonably proven that such software harms the network."

The wireless operators don't have any intention of being reduced to mere commodity providers of network services if they can help it, and this recent filing certainly won't raise Skype's reputation within the industry. Of course, since that industry already restricts Skype from running on its network, this is no big loss.
http://arstechnica.com/news.ars/post/20070221-8895.html





With One Word, Children’s Book Sets Off Uproar
Julie Bosman

The word “scrotum” does not often appear in polite conversation. Or children’s literature, for that matter.

Yet there it is on the first page of “The Higher Power of Lucky,” by Susan Patron, this year’s winner of the Newbery Medal, the most prestigious award in children’s literature. The book’s heroine, a scrappy 10-year-old orphan named Lucky Trimble, hears the word through a hole in a wall when another character says he saw a rattlesnake bite his dog, Roy, on the scrotum.

“Scrotum sounded to Lucky like something green that comes up when you have the flu and cough too much,” the book continues. “It sounded medical and secret, but also important.”

The inclusion of the word has shocked some school librarians, who have pledged to ban the book from elementary schools, and re-opened the debate over what constitutes acceptable content in children’s books. The controversy was first reported by Publishers Weekly, a trade magazine.

On electronic mailing lists like Librarian.net, dozens of literary blogs and pages on the social-networking site LiveJournal, teachers, authors and school librarians took sides over the book. Librarians from all over the country, including upstate New York; Missoula, Mont.; Portland, Ore.; and Central Pennsylvania weighed in, questioning the role of the librarian when selecting — or censoring, some argued — literature for children.

“This book included what I call a Howard Stern-type shock treatment just to see how far they could push the envelope, but they didn’t have the children in mind,” Dana Nilsson, a teacher and librarian in Durango, Colo., wrote on LM_Net, a mailing list that reaches more than 16,000 school librarians. “How very sad.”

The book has already been banned from school libraries in a handful of states in the South, the West and the Northeast, and librarians in other schools have indicated in the online debate that they may well follow suit. Indeed, the topic has dominated the discussion among librarians since the book was shipped to schools.

Pat Scales, a former chairwoman of the Newbery Award committee, said that declining to stock the book in libraries was nothing short of censorship.

“The people who are reacting to that word are not reading the book as a whole,” she said. “That’s what censors do — they pick out words and don’t look at the total merit of the book.”

If it were any other novel, it probably would have gone unnoticed, unordered and unread. But in the world of children’s books, winning a Newbery is the rough equivalent of being selected as an Oprah’s Book Club title. Libraries and bookstores routinely order two or more copies of each year’s winners, with the books read aloud to children and taught in classrooms.

“The Higher Power of Lucky” was first published in November by Atheneum/Richard Jackson Books, an imprint of Simon & Schuster, accompanied by a modest print run of 10,000. After the announcement of the Newbery on Jan. 22, the publisher quickly ordered another 100,000 copies, which arrived in bookstores, schools and libraries around Feb. 5.

Reached at her home in Los Angeles, Ms. Patron said she was stunned by the objections. The story of the rattlesnake bite, she said, was based on a true incident involving a friend’s dog.

And one of the themes of the book is that Lucky is preparing herself to be a grown-up, Ms. Patron said. Learning about language and body parts, then, is very important to her.

“The word is just so delicious,” Ms. Patron said. “The sound of the word to Lucky is so evocative. It’s one of those words that’s so interesting because of the sound of the word.”

Ms. Patron, who is a public librarian in Los Angeles, said the book was written for children 9 to 12 years old. But some librarians countered that since the heroine of “The Higher Power of Lucky” is 10, children older than that would not be interested in reading it.

“I think it’s a good case of an author not realizing her audience,” said Frederick Muller, a librarian at Halsted Middle School in Newton, N.J. “If I were a third- or fourth-grade teacher, I wouldn’t want to have to explain that.”

Authors of children’s books sometimes sneak in a single touchy word or paragraph, leaving librarians to choose whether to ban an entire book over one offending phrase.

In the case of “Lucky,” some of them take no chances. Wendy Stoll, a librarian at Smyrna Elementary in Louisville, Ky., wrote on the LM_Net mailing list that she would not stock the book. Andrea Koch, the librarian at French Road Elementary School in Brighton, N.Y., said she anticipated angry calls from parents if she ordered it. “I don’t think our teachers, or myself, want to do that vocabulary lesson,” she said in an interview. One librarian who responded to Ms. Nilsson’s posting on LM_Net said only: “Sad to say, I didn’t order it for either of my schools, based on ‘the word.’ ”

Booksellers, too, are watchful for racy content in books they endorse to customers. Carol Chittenden, the owner of Eight Cousins, a bookstore in Falmouth, Mass., said she once horrified a customer with “The Adventures of Blue Avenger” by Norma Howe, a novel aimed at junior high school students. “I remember one time showing the book to a grandmother and enthusing about it,” she said. “There’s a chapter in there that’s very funny and the word ‘condom’ comes up. And of course, she opens the book right to the page that said ‘condom.’ ”

It is not the first time school librarians have squirmed at a book’s content, of course. Some school officials have tried to ban Harry Potter books from schools, saying that they implicitly endorse witchcraft and Satanism. Young adult books by Judy Blume, though decades old, are routinely kept out of school libraries.

Ms. Nilsson, reached at Sunnyside Elementary School in Durango, Colo., said she had heard from dozens of librarians who agreed with her stance. “I don’t want to start an issue about censorship,” she said. “But you won’t find men’s genitalia in quality literature.”

“At least not for children,” she added.
http://www.nytimes.com/2007/02/18/books/18newb.html





He Confirmed It, Yes He Did: The Wicked Witch Was Dead
Dan Barry

Like any coroner, he has seen some things. But one case stays with him nearly 70 years after the fact, like some old song he can’t get out of his head.

He couldn’t shake this case even if he wanted to, what with all the videotapes, the DVDs, the television broadcasts replaying the gruesome aftermath over and over, in vivid Technicolor. Those striped socks, curling back like a pair of deflating noisemakers. ...

The coroner’s name is Meinhardt Raabe, and he lives in a retirement community tucked between here and there. He can’t see or hear too well, and his short legs need the assistance of a three-wheeled walker with hand brakes. But none of this means that at 91 he has forgotten much, because he hasn’t — especially about that case.

Sitting on his small bed, his coroner’s outfit stored in a closet, Mr. Raabe recalls a rich and varied life but makes clear that he accepts, even embraces, how his obituary will read: Munchkin City coroner, handled case of woman killed by house that fell from the sky.

It’s hard to imagine now, but the freak accident was just one of many wacky events in a wacky, politically charged time, a time when monkeys could fly and trees could talk and life could change on a witch’s whim.

With enchantment — or was it poppies? — infusing the air, a coroner’s role was not so much to determine a cause of death as it was to determine whether death had indeed occurred. The victim’s identity only complicated matters: as luck would have it, she was a witch, a bad one, from the east.

That is why curious residents in curious garb, led by a mayor whose shoes sprouted flowers, surrounded Mr. Raabe as he unfurled his scroll. With cameras rolling, he announced his findings:

“As coroner, I must aver, I thoroughly examined her. And she’s not only merely dead, she’s really, most sincerely dead.”

If his words seem mannered, one should remember they were delivered in the singsong language indigenous to the region. And if his ruling caused some problems for the Kansas-based driver of the house and some grief for the victim’s green-skinned sister, it was good news for Munchkinland, Oz — and Mr. Raabe, whose name rhymes with “hobby.”

“I’m still getting mail,” he says, pointing to stacked milk crates packed with letters yet to be answered. He just cannot get to them all.

As Mr. Raabe recalls in his autobiography, “Memories of a Munchkin” (Back Stage Books, 2005), he did not follow a coroner’s typical career path. The son of Wisconsin dairy farmers, he endured years of schoolyard teasing about what he calls his “abnormal lack of height” before wandering one day into the Midget Village attraction at the 1933 Chicago World’s Fair.

Walking its streets, meeting its inhabitants eye to eye, he realized that smallness was no impediment to happiness. “It was a new world,” he says.

For the next three years, Mr. Raabe worked summers with other little people at expositions around the country, often as a pitchman. He eventually graduated from the University of Wisconsin with a bachelor’s degree in accounting, only to learn that no firm would hire him.

“You don’t belong here,” he remembers being told. “You belong in a carnival.”

Mr. Raabe eventually got a job as Little Oscar for the Oscar Mayer meat company. Then, in 1938, came word through the grapevine of a demand for little people in Hollywood. Sensing opportunity, he boarded a train due west.

In a place where people came and went so quickly, the casting director first chose the Mayor, the three Lullaby League dancers and the three members of the Lollipop Guild. Then he lined up Mr. Raabe and several other little men and asked them to say the fateful line: “As coroner, I must aver. ...”

“I read that line and I let go,” he recalls. “And he said, ‘O.K., you’re the coroner.’ ”

Mr. Raabe’s pronouncement lasted only 13 seconds, and his lines were dubbed over. But he had made his mark.

After filming ended, he returned to Oscar Mayer and to real life. He learned to fly airplanes. He joined the Civil Air Patrol during World War II. He earned a master’s degree in business administration. He married a cigarette girl who was about his height; her name was Marie, and her beauty stole his breath. Fifty years they had, until her death in a car accident a decade ago.

Now Mr. Raabe lives alone at the Penney Retirement Community, behind a door with a sign that says “No Place Like Home.” Above his bed hangs a portrait of that girl from Kansas and her unusual pals; they’ve all passed on. So has the Wizard, who liked his drink, and the Good Witch, who was a bit of a prima donna, and the Wicked Witch of the West, who was the kindest of them all.

Every once in a while, though, his presence is requested at some Oz-related function; he is, after all, the oldest living resident of that faraway world. He dons his outfit, poses for photographs and catches up with some of the half-dozen or so Munchkin City residents still around: the last of the Lollipop Guild trio, one of the Sleepyheads, a soldier.

Despite that unfortunate house-on-woman matter, Mr. Raabe says his days in Oz were among the happiest of his life. And for anyone who asks, he will say that as coroner, he must aver, which means to assert with confidence.
http://select.nytimes.com/2007/02/18/us/18land.html





A Creepy Stash of Movie Magic, Lovingly Amassed
Dave Kehr

HOLLYWOOD is notorious for abandoning its past, but luckily there are people like Bob Burns around to pick it up, put it in a cardboard box and take it home. Mr. Burns, who lives on a tranquil, tree-lined street here, has a fair share of Hollywood’s institutional memory stashed in the crowded back room of the tidy white bungalow he shares with Kathy, his understanding wife of 50 years.

Bob’s Basement, as the collection has come to be known to horror and science-fiction fans (though it has never actually been stored in an underground room) may well be the premier film museum in the Los Angeles area, though it is not open to the public and has no regular hours. People phone and just drop in, drawn from around the world by the glorious clutter of Mr. Burns’s heaped-up holdings.

In Bob’s Basement, for example, you can meet the biggest movie star in the world: the original King Kong, or at least the only surviving 18-inch armature that the sculptor Marcel Delgado created for the special effects wizard Willis O’Brien, whose painstaking, frame-by-frame animation brought Kong to life in the 1933 film. Kong is a bit slimmer these days, having lost the foam rubber padding and rabbit-fur coat he wore when he climbed the Empire State Building. Today he stands as a marvelously intricate metal skeleton, fashioned out of nuts, bolts and forged steel. His soulful eyes are empty sockets now, but somehow Kong’s personality still clings to this totemic object.

“When you have in your hand a prop from a movie that’s in your psyche, there’s a strange emotional connection that is made,” said the director Joe Dante, some of whose most famous creations now live in Bob’s Basement, including a few versions of the cuddly Gizmo character from “Gremlins” (1984). “Somebody who’s into books might have the same feeling in the presence of a manuscript by Charles Dickens.”

A supremely affable man with a mischievous smile and a Captain Kangaroo mustache, Mr. Burns, 71, is now retired from a series of jobs, from film editor to gorilla impersonator. He does not guide his visitors through the collection as much as turn them loose among the mounds of props and costumes and models and matte paintings that he has amassed since he was a boy and became fascinated by the mechanics of movie magic. “Have a look around,” he says.

Here are the embroidered tunics worn by some of the most famous superheroes of the Republic serials of the 1940s, including Captain America, the Spy Smasher and, suspended in a swooping pose from the ceiling, a dummy wearing the leather flying suit worn by the legendary stuntman Dave Sharpe in “King of the Rocket Men” (1949). Here are the giant black clodhoppers worn by Glenn Strange when he played Frankenstein’s monster in “Abbott and Costello Meet Frankenstein.”

There, on the floor, is a melting pink mass with Jeff Goldblum’s face, a transitional effect from David Cronenberg’s 1986 film “The Fly.” A lineup of space helmets includes everything from the ridiculous headgear worn by George Barrows in the endearingly awful 1953 “Robot Monster” (which resembles a rabbit-ear TV antenna glued to a fishbowl) to the convincingly high-tech plastic helmet worn by Sigourney Weaver in “Alien.”

And almost everything is hands on, ready to be poked and prodded to reveal its secrets. For young special effects buffs hanging out at Bob’s has been a way of learning a craft that was not taught in schools. Dennis Muren, now the senior visual effects supervisor for Industrial Light & Magic, got his start helping build and run the neighborhood Halloween shows Mr. Burns began in 1969.

Rick Baker, who has won six Oscars as a makeup artist, was a shy 13-year-old from Covina, obsessed with makeup and a faithful reader of Mr. Burns’s magazine Fantastic Monsters of the Films, when he asked his father to call Mr. Burns to see if he might come pay a visit.

“Bob and Kathy were incredibly gracious,” Mr. Baker recalled recently. “He showed me how to do a gash out of mortician’s wax and how to color it with pancake makeup. And I showed him some masks I had made that he was very impressed by. It was an unforgettable experience.”

When Mr. Baker won the first Academy Award given for makeup, for John Landis’s “American Werewolf in London” in 1982, he offered some of the used props to Mr. Burns; the huge wolf puppet he created, along with an artificial arm that grows werewolf fingernails when a rod is pressed, retain pride of place in Mr. Burns’s collection along with three of the alien masks Mr. Baker created for the canteen sequence in “Star Wars” and other bits of Mr. Baker’s work, including the Bela Lugosi mask Martin Landau wore in Tim Burton’s “Ed Wood.”

Mr. Burns was a boy from Muskogee, Okla., when his father moved the family to Burbank, where he worked at a Lockheed defense plant. As it turned out, Burbank was also home to many technicians and office workers who labored at the nearby movie studios: Warner Brothers, Universal and the vanished Republic.

“I lived next door to a gal who was Roy Barcroft’s secretary,” Mr. Burns recalled, referring to the character actor who played countless roles, mostly villainous, in westerns and serials in the ’30s, ’40s and ’50s. The secretary arranged an introduction, and Mr. Barcroft invited the 10-year-old Bob Burns to visit Republic, where Mr. Barcroft was playing the title role in “The Purple Monster Strikes.”

“That day changed my life,” said Mr. Burns, who now counts Mr. Barcroft’s Purple Monster costume among his treasures. Later a friend’s father turned out to be Ellis Berman, a special effects technician at Universal. He had kept the silver wolf’s head cane ornament that Claude Rains used to kill his lycanthropic son, Lon Chaney Jr., in “The Wolf Man” in 1941. Seeing how fascinated the boy was by the prop — which was made of rubber and painted to look like silver — Mr. Berman offered it to him. The piece is still in Mr. Burns’ collection, and is one he handles with a special affection.

That “silver” ornament is exactly the sort of material manifestation of the special effects artist’s work that is rapidly disappearing, as the mechanical effects of yesterday are gradually replaced by digital effects. Dennis Muren’s computer-based work for George Lucas helped to transform the field, and Mr. Baker, who once kept a machine shop busy turning out costumes and props, now does much of his work in the virtual world.

“The best approach is still a combination of the two methods,” Mr. Baker said. “But the big machine shop is kind of useless now.”

Mr. Dante agreed that the digital revolution has largely transformed the field, though he added that “there are still uses for that kind of mechanical stuff, usually in connection with doing close-ups of actors.”

“They keep asking me if I’m going to make another ‘Gremlins’ ’’ he said. “But it won’t be anything like the movies we made, because that technology is obsolete, and those movies were defined by the limitations of the technology. Now the sky’s the limit. Anything you can think of, you can do if you’ve got the money.”

Today’s special effects will be stored on discs and tapes, not here. But maybe that’s just as well. Bob’s Basement is filling up.
http://www.nytimes.com/2007/02/18/movies/18kehr.html





And for My Acting Oscar, I Thank the Special Effects
Ben Hoyle

From a welling tear to a wounded stare, the ability to project convincing emotions in close-up is the test of a cinema actor. But now it appears that there is more to some star turns than meets the audience’s eye.

Directors have started to manipulate actors’ performances in postproduction.

Modern visual effects technology allows them to go beyond traditional cosmetic changes, such as removing wrinkles and unsightly hairs, and adjust actors facial expressions and subtly alter the mood of a scene.

At the Visual Effects Society’s recent conference, Jeff Okun, the organisation’s chairman, showed before and after versions of one of the climactic shots in the Oscar-nominated film Blood Diamond.

In the “before” shot Jennifer Connolly, the leading lady, was shown talking on her mobile phone. The digitally manipulated “after” shot showed her talking on her mobile phone with a tear rolling down her cheek. Such alterations are becoming increasingly common, but practitioners are discouraged from discussing this work.

“Acting is all about honesty, but something like this makes what you see on screen a dishonest moment,” said a leading technician. “Everyone feels a bit dirty about it.”

Visual effects experts privately admit to changing actors’ expressions: opening or closing eyes; making a limp more convincing; removing breathing signs; eradicating blinking eyelids from a lingering gaze; or splicing together different takes of an unsuccessful love scene to produce one in which both parties look like they are enjoying themselves.

Mr Okun told The Times: “What used to cost £40,000 is now only going to cost you £6,000. It’s cheaper than reshooting a scene. We are put in a difficult moral position when directors ask us to change an actor’s performance. The performance is sacrosanct and to alter it is creepy. But we don’t get hired by actors. We get hired by directors.”

One veteran effects man said: “Most of the time, the changes are asked for by directors who don’t know what they are doing. The sort who in post production go, ‘Oh, now I see what I should have done.’ ” Actors are understandably concerned. According to Variety, the leading industry publication, a proposal to give actors approval of digital alterations was first put forward in negotiations with the Alliance of Motion Picture and Television Producers in 1998. Tom Le Grua, of the Screen Actors Guild, told the magazine: “The proposal said no part of a performance may be altered digitally or otherwise without the performer’s consent.” It was rejected and has languished since in committee discussions.

Some actors such as Tom Cruise have begun to write clauses into their contracts granting them full control of their own digital assets, Mr Okun said. “They are saying: if you make me look better, then it’s fine. But if you are dealing with the subtleties of a dramatic performance it’s not fine.”

However, Matt Johnson, a visual effects supervisor at Cinesite in Soho, London, who worked on King Arthur and V for Vendetta, said: “Actors have always known that directors would manipulate their performances [by clever editing in postproduction]. Now they are realising that visual effects can give directors even more choice. But I think it would be quite challenging to take a performance that wasn’t working at all and completely revolutionise it digitally. Audiences would be able to spot that.”
http://entertainment.timesonline.co....cle1403516.ece





Old Media Partying With Oscar Online
Katharine Q. Seelye

Here are two numbers to think about next Sunday night when you are rolling your eyes at the length of time it takes an Oscar winner to say thank you.

In January, the Golden Globes drew 20 million television viewers. And within a day of the ceremony, people.com, the Web site of People magazine, drew 39.6 million page views.

Page views and television viewers, of course, are not the same thing. Page views refer to the number of clicks on a Web page, and the same person could be clicking many pages.

Still, 39.6 million page views is a lot — and that was just for the Golden Globes. Imagine what traffic will be like for the Oscars, traditionally the second-biggest television event of the year after the Super Bowl.

The pre-Oscar drumbeat seems particularly intense this year as Web sites of the old media have jumped on the bandwagon and begun aggressively courting all those multitaskers who watch television and surf the Web at the same time.

People magazine, Vanity Fair (vanityfair.com), The Los Angeles Times (theenvelope.com), Entertainment Weekly (ew.com), E! (www.eonline.com) and many others have dedicated sections of their Web sites to all things Oscar. Many are counting down to an Oscar night with promises of more video, more blogs, more polls for fans, more predictions from experts and more sweepstakes than ever before. ABC, which is broadcasting the awards ceremony and promoting specials with Oprah Winfrey and Barbara Walters, has given the official Oscar Web site (oscar.com) a complete makeover.

Harnessing themselves to such blockbuster events marks yet another step in the integration of old media like magazines, newspapers and television into the online world.

The Oscars can help cement the brand loyalty of millions of Web surfers, who, at least in the case of print, are often moved to subscribe to the print product while visiting its companion Web site.

“Our first goal is to build traffic and get people hooked on people.com,” said Martha Nelson, editor of Time Inc.’s People Group. “Any time you have more traffic, you’re going to sell more subscriptions.”

At stake is millions of dollars as the Oscars — and the surrounding hype — drive page views higher, and Web sites can sell ad space for their Oscar sections at premium prices. Oscar-related sites are popular not only with studios promoting their movies but with major advertisers. L’Oréal, for example, is sponsoring Vanity Fair’s Oscar night coverage both online and in the magazine for the third year in a row.

“One reason people chase these big events on the Web is the big burst in traffic, and the ability to sell a sponsorship becomes more profitable the bigger you get,” said Sarah Chubb, president of CondéNet, the online division of Condé Nast, which publishes Vanity Fair. Unlike print products, she noted, Web sites do not cost any more to produce whether they are viewed by 30 people or 30 million.

Magazines, in particular, may have been slow to the Internet party. But the Oscars are a natural vehicle for showcasing themselves online. While many will offer blogs and snapshots from the red carpet, there is intense competition to offer material that readers cannot find anywhere else.

Vanity Fair, for example, has been the host of an exclusive after-party at the Oscars since 1994. This year, for the first time, it will post photographs and blogs from the party while it is still in full swing.

“We feel like the Oscars are such a big part of what Vanity Fair is, and now we have more capability to cover it in a more immediate way than in the past,” said Andrew Hearst, Vanity Fair’s online editor. “We’re almost covering it in real time.”

Vanity Fair will also have video from the party, which will appear on the Web site a week later, a time frame that stretches out the experience and gives readers a reason to return to the site long after Oscar has gone home.

This is the first year that People magazine has dedicated a special section on its Web site to the Oscars. The magazine has its own “After Midnight” party at a private home, and it also plans to post photographs and, possibly, video from the event.

Innovations this year include having people.com answer questions live during the broadcast about the goings-on. Its “Red Carpet Confidential” will have reporters transmitting items from behind the scenes. And as part of the buildup to the show, the staff will bring in the swag bags they collect around Hollywood through the week. “We’ll photograph this growing pile of goodies several times a day,” Ms. Nelson said.

Even the Academy of Motion Picture Arts and Sciences, faced with drooping ratings on Oscar night, has become aware that it can build excitement for the show through its official Web site, oscar.com, produced in conjunction with ABC.

Ratings have fluctuated with the popularity of the movies nominated for best picture. In 2003, when “Chicago” won, only 33 million watched; two years later, “Million Dollar Baby” pushed viewership to 42.1 million.

The audience fell again last year, to 38.9 million, with “Crash.” But all of these pale against 1998, when “Titanic” won and 55 million people watched. (The Super Bowl traditionally draws about 90 million.)

Among the offerings on the official Web site are a presidential-campaign-style “Road to the Oscars” video; a regularly updated video diary from the host, Ellen DeGeneres; and a cellphone link that will alert fans to red carpet arrivals and let them see instant replays of her quips. During the broadcast, she is to direct viewers early and often to the Web site.

The site will also serve as a repository for things that could otherwise bog down the live proceedings. It will have a “Thank You Cam,” for example, where winners can deliver all the thanks that they are unable to squeeze into the 45 seconds they are allotted on stage.

For magazines, the subscriptions obtained online can produce a cascading series of benefits.

It is much cheaper for a magazine to get subscribers through a Web site than through direct mail, for example. And people who subscribe online are eager consumers.

Thomas J. Wallace, editorial director of Condé Nast, said readers of his company’s magazines are renewing their subscriptions through the Web at twice the rate of those solicited by mail. Moreover, he said, they are on average six years younger, “so they’ll be with us longer.”

“Since they were acquired digitally, they’ll renew digitally,” he said, “and we expect significant downstream savings through that renewal process.” He said one Condé Nast magazine had already increased its print circulation enough through its Web site that it had been able to raise its rates for advertisers.

So far, the Oscar-crazed Web activity by old media seems to be a boon to the smaller independent Web sites that have been covering the Oscars for years. Sasha Stone, who started oscarwatch.com in 1999, said she was initially worried about the competition. “I was an amateur, and I knew if the pros got involved, that would obliterate my site,” she said.

But Oscar-mania apparently only feeds more mania. “Newspapers are more concerned about me because I have the freedom to do whatever I want,” she said. “They’re creaming me traffic-wise, but they don’t take away my audience. People have their bookmarks and they hit one site and then another. What’s good for one site is good for them all.”

Who knows? With all the Web traffic on Oscar night, there may be more page viewers this year than television viewers.
http://www.nytimes.com/2007/02/19/bu.../19oscars.html





Major Media Trying to Improve the Methods by Which They Measure Audiences
Stuart Elliott

If the 20th century was known in marketing circles as the advertising century, the 21st may be the advertising measurement century.

Marketers are increasingly focused on the effectiveness of their pitches, trying to figure out the return on investment for ad spending. That is spurring most of the major media along with many large research companies like Arbitron, Nielsen and Taylor Nelson Sofres to improve the methods by which they measure audiences.

The ability of newer digital media to provide more precise data has also led traditional media like television, radio, magazines and newspapers to try upgrading the ways they count consumers.

"There's a little something called the Internet, something that all other media are trying to get as accountable as," said Jon Mandel, chief executive at Nielsen's NielsenConnect unit in New York, which brings together data from various Nielsen divisions.

Take, for instance, the outdoor advertising industry, which has for years been trying to better quantify not only the number of people who pass by posters, billboards and other signs but also the number who notice and remember them.

Now, the industry's official auditing organization, the Traffic Audit Bureau, is accelerating plans to deliver improved information to advertisers and agencies. The bureau has set a target date of October 2008 to introduce a comprehensive measurement system for more than 200 markets nationwide.

"Sooner is better than later," said Joseph Philport, president and chief executive at the bureau in New York.

"The absence of better numbers has always been a barrier to entry," Philport added, referring to the reluctance of many marketers to increase spending for ads that appear outside the home.

A recent report from Wachovia Capital Markets about outdoor advertising estimated that introducing the improved measurement system would cost the industry $25 million over the next five years.

But it has the potential to double, to 4.4 percent, the share of American ad spending devoted to signs, posters and billboards, the report estimated. The Universal McCann media agency said marketers would spend $7.2 billion on outdoor ads this year, compared with $6.7 billion in 2006.

That growth rate is the second fastest among all media, after the Internet. That reflects the increasing appeal of outdoor advertising — one of the oldest of the old media — as advertisers explore tactics that consumers cannot avoid by changing the channel or turning the page.

"The out-of-home medium provides a broad-reach platform to showcase our products in a cost-effective way," said Mark Kaline, global media manager at Ford Motor in Dearborn, Michigan.

The medium should become more attractive as more digital signs become available, Kaline added. The digital signs, which can be changed continuously, offer "the ability for marketers to tailor copy to a given market, at a given time of day, to specific market conditions," he said.

Such improvements, however, would require more accurate methods to measure audiences. The current system is based on traffic — estimating the number of passers-by, with no idea of whether they actually look at a sign or recall the product being peddled.

It is "somewhat admittedly a crude system, counting the people who pass our signs," said Paul Meyer, president and chief operating officer at Clear Channel Outdoor in Phoenix, Arizona, one of the three largest outdoor-media companies, with CBS and Lamar Advertising.

"The industry has been perceived to be slow and overly methodical" in considering changes, Meyer added. "If we could provide good rich demographic data, in a form compatible with what advertisers are accustomed to seeing from other media, they will start spending dollars in our medium or spend more."

The Traffic Audit Bureau has hired three research companies — the GfK Group, the Telmar Group and Transearch — to compile various kinds of data including traffic counts and travel patterns, and even to track eye movements of people as they pass outdoor signs.

"What the research measures is 'eye- dwell,'," said Erwin Ephron, a principal at Ephron Papazian & Ephron in New York, who is working with the bureau on the project. "If the eye fixes on it, you've noticed it.

"Like newspapers saying all sales are local, what outdoor has been saying is that you can't avoid that kind of advertising," Ephron added. After someone notices a sign, he said, the rest is a question of how creative the ad is and how relevant the product.

The growing popularity of digital signs brings a new urgency to the bureau's efforts, Ephron said, because a sign that can be shared by several advertisers "lowers the price of entry."

Advertisers would no longer have to commit to a sign for 30 days, and the effect, he said, would be like the upheaval decades ago when the standard TV commercial "went from the 60-second spot to the 30."

This month, the Mediamark Research unit of GfK began conducting 4,200 traffic surveys for the bureau in five major markets: Atlanta, Chicago, Dallas, Philadelphia and San Francisco. Plans call for Mediamark to conduct 45,000 additional surveys in a total of 15 large cities, Philport said.

The bureau intends to brief media and agency executives about its progress at a meeting in New York scheduled for March 27, he added.

As the bureau moves forward, so, too, does Nielsen, which in 2005 announced that Nielsen Outdoor intended to improve the data it reported about outdoor ads. The Nielsen efforts are centered on a global positioning system it calls Npod, while the bureau is using various methods that include diaries.

Nielsen released data from its first market, Chicago, in December 2005. Information from the second market, Los Angeles, is to come out in late spring, said Lorraine Hadfield, managing director for international audience measurement at Nielsen, and the company is "targeting a roll-out to the top 10 markets in the U.S., where the most interest is from potential subscribers."

Hadfield added that Nielsen intended to brief agencies and advertisers about its plans at the 2007 media conference and trade show of the American Association of Advertising Agencies, scheduled for next week in Las Vegas.

There is some elbows-out competition, reminiscent of the cola wars, between Nielsen and the bureau over their dueling measurement systems.

As for competing sets of figures, "it depends on how cost-effective each application is," Kaline, of Ford, said. "The industry will address that issue."
http://www.iht.com/articles/2007/02/...iness/adco.php





Commercial Pitched at Teenagers Worked for Movie
Maria Aspan

If you can't hear the advertising, then maybe the movie isn't for you.

That was the implicit message in a television commercial for "The Messengers," a horror film from Sony's Screen Gems division that opened in American theaters this month. In addition to the usual ominous music, slow- motion images and deep-voiced narration, the commercial featured a high- pitched noise that most adults are unable to hear.

The film's plot involves supernatural phenomena that can be observed by children and teenagers, but not the adults around them. In an effort to emphasize this plot and to attract more teenagers to movie theaters, Screen Gems developed a commercial that contained the high-frequency noise and asked viewers if they could hear it.

"If children can hear this," the narrator declared, over quick shots of creepy hallways and ghostly figures, "imagine what they are seeing."

The sound was initially used in the Mosquito security devices in Britain to discourage teenagers from loitering around convenience stores. But teenagers quickly adopted the sound as a cellphone ring tone that allows them to hear their phones without alerting adults.

At a pitch of 17 kilohertz, the noise is well above the normal range of adult hearing. (Most adults are unable to hear sounds above a frequency of 8,000 hertz.)

Mark Weinstock, the executive vice president for marketing at Screen Gems, said the idea for the commercial was developed during a planning session on ways to appeal to a teenage audience and reflect the plot.

Weinstock said that the company did not formally test the high-pitched noise, but that "when we would play it in meetings, some of the senior staff couldn't hear it," while younger staff and interns could.

The television commercial is no longer being shown, but it appears to have been effective; the movie led the box office on its opening weekend and with a budget of $16 million is projected to take in about $35 million. According to Weinstock, the commercial alone was a success.

"The spots were really effective because people really remembered them," Weinstock said, adding that he was especially pleased at the commercial's success with the desired teenage audience. "I think they're looking for something they can adopt as their own," he said.
http://www.iht.com/articles/2007/02/...iness/adco.php





Drug Maker Produces Documentary on Chronic Illness
Stephanie Saul

"Innerstate," a documentary about three people coping with disabling chronic illness, may be coming to a theater near you.

If so, admission will be free, courtesy of the drug maker that produced the film.

The 58-minute film, which was to have its premiere Wednesday in New York, is an unusual form of soft-pedal marketing of a blockbuster drug, Remicade.

The documentary never specifically mentions Remicade, or the product's maker, Centocor, a unit of Johnson & Johnson. Instead, it focuses on several of the autoimmune diseases Remicade is approved to treat: rheumatoid arthritis, psoriasis and Crohn's disease.

Although drug companies have previously helped finance documentaries about certain diseases, with the films sometimes produced by patients themselves, industry experts said they could remember no other documentary conceived of and financed start-to-finish by a drug maker. That includes Michael Parks, a Centocor spokesman.

"We're trying to educate people with these diseases," Parks said. "They're not alone out there."

The film, directed by Chris Valentino and produced by the Creative Group, is the latest twist on a business trend toward blending advertising and entertainment. Last month, for example, Toyota and the Speed Channel rolled out "Two Roads to Baja," an hourlong special featuring two teams in an automotive endurance race. Each drove an FJ Cruiser, a Toyota sport utility.

"Innerstate" is scheduled for special screenings in 14 American cities from now to June. Many of those in the audience are expected to be patients with the diseases or members of their families, who have been invited to attend.

After watching the film, audiences in each city will have a chance to quiz panels of doctors specializing in the three diseases. Through a cooperative arrangement, several foundations plan to distribute the documentary in video form for members who ask for it.

Parks said there would also be a Web site associated with the film, myInnerstate.com.

The National Psoriasis Foundation approved the film after a preview.

"It's a great way to get the word out about the disease," said a spokeswoman, Paula Fasano. "We looked at the film to make sure it was fair and balanced. The purpose of the film is not so much about treatment as emotional burden. It doesn't talk about the drugs."

Fasano said her organization was posting information about the screenings on its Web site, www.psoriasis.org.

The foundation helped distribute another film, "My Skin's on Fire" by Fred Finkelstein, a man with psoriasis, an inflammatory skin condition. Finkelstein received some financing for the project from the drug company Genentech, Fasano said. She described that film as more of a grass-roots effort than the Centocor project.

"Innerstate" uses travel imagery to evoke a journey from symptoms to diagnosis to coping. It tells the story of three patients, through interviews with them, their families and their doctors.

Jason Knott, a Texas man diagnosed with psoriasis, tells of the mental anguish he felt as a child.

"I remember getting in the pool and I remember parents pulling their kids out of the pool," said Knott, who is 33. "The memory of almost like a leper getting in the pool. I never went back to that pool again. It wasn't a happy place I could return to."

Later, he said, he returned to the site to rejoice as the pool was being destroyed.

A Maryland man, Ray Ciccarelli, 36, tells how his career as an aspiring Nascar driver was sidelined by Crohn's disease, an inflammatory condition of the digestive tract, and how he struggled for a diagnosis for his chronic diarrhea and weight loss.

And Janie Feliz, a 20-year-old singer from Texas, tells of the pain of rheumatoid arthritis. "My whole body felt like someone was stabbing me," she said.

None of the participants in the film were paid, according to Parks, who declined to disclose the budget for the project.

According to the film, each of the patients got relief from a "biologic," and Ciccarelli is shown receiving an intravenous infusion, but the product is never identified. Remicade is a biologic drug, meaning it is manufactured in cultures of living cells, rather than being made of chemical compounds as are many drugs taken in pill form.

The film also discusses potential side effects of such biologics, which include increased risk of infections like tuberculosis.

Last year, Remicade had sales of $3 billion worldwide and $2.3 billion in the United States. But Remicade's movie debut comes as the company is facing stiff competition.

Available only through injections delivered by a medical professional, Remicade already has competition from three products that patients can administer through self-injection: Humira by Abbott, and Kineret and Enbrel by Amgen.

Two more infusion products that might compete with Remicade have entered the market in the last year, Orencia by Bristol-Myers Squibb and Rituxan by Genentech.
http://www.iht.com/articles/2007/02/...iness/adco.php





Hip-Hop Outlaw (Industry Version)
Samantha M. Shapiro

Late in the afternoon of Jan. 16, a SWAT team from the Fulton County Sheriff’s Office, backed up by officers from the Clayton County Sheriff’s Office and the local police department, along with a few drug-sniffing dogs, burst into a unmarked recording studio on a short, quiet street in an industrial neighborhood near the Georgia Dome in Atlanta. The officers entered with their guns drawn; the local police chief said later that they were “prepared for the worst.” They had come to serve a warrant for the arrest of the studio’s owners on the grounds that they had violated the state’s Racketeer Influenced and Corrupt Organizations law, or RICO, a charge often used to lock up people who make a business of selling drugs or breaking people’s arms to extort money. The officers confiscated recording equipment, cars, computers and bank statements along with more than 25,000 music CDs. Two of the three owners of the studio, Tyree Simmons, who is 28, and Donald Cannon, who is 27, were arrested and held overnight in the Fulton County jail. Eight employees, mostly interns from local colleges, were briefly detained as well.

Later that night, a reporter for the local Fox TV station, Stacey Elgin, delivered a report on the raid from the darkened street in front of the studio. She announced that the owners of the studio, known professionally as DJ Drama and DJ Don Cannon, were arrested for making “illegal CDs.” The report cut to an interview with Matthew Kilgo, an official with the Recording Industry Association of America, who was involved in the raid. The R.I.A.A., a trade and lobbying group that represents the major American record labels, works closely with the Department of Justice and local police departments to crack down on illegal downloading and music piracy, which most record-company executives see as a dire threat to their business.

Kilgo works in the R.I.A.A.’s Atlanta office, and in the weeks before the raid, the local police chief said, R.I.A.A. investigators helped the police collect evidence and conduct surveillance at the studio. Kilgo consulted with the R.I.A.A.’s national headquarters in advance of the raid, and after the raid, a team of men wearing R.I.A.A. jackets was responsible for boxing the CDs and carting them to a warehouse for examination.

If anyone involved with the raid knew that the men they had arrested were two of the most famous D.J.’s in the country, they didn’t let on while the cameras were rolling. For local law enforcement, the raid on Drama and Cannon’s studio was no different from a raid they executed in October on an Atlanta factory where a team of illegal immigrants was found making thousands of copies of popular DVDs and CDs to sell on the street. Along with the bootlegged CDs, the police found weapons and a stash of drugs in the factory. (The Fox report on the DJ Drama raid included a shot of a grave-looking police officer saying, “In this case we didn’t find drugs or weapons, but it’s not uncommon for us to find other contraband.”)

But Drama and Cannon’s studio was not a bootlegging plant; it was a place where successful new hip-hop CDs were regularly produced and distributed. Drama and Cannon are part of a well-regarded D.J. collective called the Aphilliates. Although their business almost certainly violated federal copyright law, as well as a Georgia state law that requires CDs to be labeled with the name and address of the producers, they were not simply stealing from the major labels; they were part of an alternative distribution system that the mainstream record industry uses to promote and market hip-hop artists. Drama and Cannon have in recent years been paid by the same companies that paid Kilgo to help arrest them.

The CDs made in the Aphilliates’ studio are called mixtapes — album-length compilations of 20 or so songs, often connected by a theme; they are produced and mixed by a D.J. and usually “hosted” by a rapper, well known or up-and-coming, who peppers the disc with short boasts, shout-outs or promotions for an upcoming album. Some mixtapes are part of an ongoing series — in the last few years, the Aphilliates have produced 16 numbered installments of “Gangsta Grillz,” an award-winning series that focuses on Southern hip-hop; others represent a one-time deal, a quick way for a rapper to respond to an insult or to remind fans he exists between album releases. The CDs are packaged in thin plastic jewel cases with low-quality covers and are sold at flea markets and independent record stores and through online clearinghouses like mixtapekingz.com. A mixtape can consist of remixes of hit songs — for instance, the Aphilliates offered a CD of classic Michael Jackson songs doctored by a Detroit D.J. Or it can feature a rapper “freestyling,” or improvising raps, over the beat from another artist’s song; so, on one mixtape, LL Cool J’s “Love You Better” became 50 Cent’s “After My Cheddar.” In most cases, the D.J. modifies the original song without acquiring the rights to it, and if he wants to throw in a sample of Ray Charles singing or a line from a Bugs Bunny cartoon, he doesn’t worry about copyright. The language on mixtapes is raw and uncensored; rappers sometimes devote a whole CD to insulting another rapper by name. Mixtapes also feature unreleased songs, often “leaked” to the D.J. by a record label that wants to test an artist’s popularity or build hype for a coming album release. Record labels regularly hire mixtape D.J.’s to produce CDs featuring a specific artist. In many cases, these arrangements are conducted with a wink and a nod rather than with a contract; the label doesn’t officially grant the D.J. the right to distribute the artist’s songs or formally allow the artist to record work outside of his contract.

In December, not long before the bust, I spent a week with DJ Drama and the Aphilliates in Atlanta. The D.J.’s are true celebrities in the city’s vibrant hip-hop community. They were seated at the V.I.P. tables at nightclubs and parties and surrounded by fans at strip clubs, which in Atlanta are considered crucial venues for new hip-hop; tracks are often given their first spins while strippers frantically shake their behinds.

Although the music that the Aphilliates promote glorifies violence and drug dealing — one of their trademark Gangsta Grillz sound effects is a few shots fired by a gun with a silencer, followed by the thud of a body dropping — they did not live a gangster lifestyle. (Drama often rose at 8 a.m. to take his oldest daughter to kindergarten at a private school.) Instead, they seemed to be aspiring young music executives with a long-term business plan who had figured out a faster and more lucrative way to make it big than an internship at a record label.

The success of “Gangsta Grillz” had secured for the Aphilliates their own radio shows and record contracts, as well as endorsement deals with Pepsi and clothing companies. When I visited, the Aphilliates were working on an “official” Gangsta Grillz release, to be distributed by Grand Hustle, part of Atlantic Records; Drama said it would use only licensed songs and cleared samples. In September, the Aphilliates signed a partnership deal with Asylum Records, part of Warner Music Group, to distribute albums that Drama and Cannon would produce.

DJ Drama knew that aspects of his business were in what he described to me as “a legal gray area,” and he was secretive about even the most basic facts of how the Aphilliates ran their business. He allowed that he had “got rich” because of his reputation as a mixtape D.J., though he would not even admit to me that he actually sold mixtapes. The line between self-promotion and secrecy was sometimes an awkward one for him to walk, especially as his underground CDs moved further into the mainstream. Several small distributors had begun selling Drama’s CDs, repackaged with scannable barcodes, to major retailers like Best Buy.

One of the CDs confiscated by R.I.A.A. investigators during the Atlanta raid was “Dedication 2,” a mixtape that DJ Drama made with Lil Wayne, a New Orleans rapper; it appeared on the Billboard hip-hop and R&B charts and was widely reviewed in the mainstream press. (Kelefa Sanneh of The New York Times chose “Dedication 2” as one of the 10 best recordings of 2006.) As the R.I.A.A. agents boxed up Drama’s stash of “Dedication 2,” the CD continued to sell well at major retailers like Best Buy and FYE (a national chain of record stores) and also at the iTunes Store online.

The local Fox report of the bust was posted on the Internet and widely viewed. The spectacle of men who were known to every hip-hop fan as players in the mainstream music industry being arrested with the aid of the enforcement arm of that same industry was so bizarre and unexpected that a handful of conspiracy theories quickly arose to explain what had happened. Some fans speculated on message boards that the D.J.’s must have been running other illegal businesses on the side. There were others who thought that the bust was payback from a small distributor who had recently sued DJ Drama for violating a contract. But most fans simply thought the men were victims of a music industry that didn’t understand hip-hop. The day after Drama’s arrest, fans circulated on the Internet a stylized image of Drama’s face over a caption that said “Free Drama and Cannon.” Mixunit.com, the biggest Web distributor of mixtapes, removed its entire stock from the site and posted pictures of Drama and Cannon on its main page with the message, “Free the D.J.’s.” A member of the Diplomats, a Harlem hip-hop group, told MTV News that Jan. 16 was “D-day in hip-hop.” Some fans said that in protest they’d never buy another label release; a New York City radio D.J. called record labels the ultimate “snitches.”

Lil Wayne, who made “Dedication 2” with Drama, said in an interview that Drama would have to “play the game fair,” adding that he thought it was unfortunate that sometimes mixtapes outsell an artist’s official label releases, cutting into the artist’s royalties. Soon after, Rapmullet.com, one of the most prominent mixtape Web sites, posted an image of Wayne on its home page over the words: “Is Wayne a traitor? Did he side with the suits? We didn’t abandon Drama — will you? Who’s next to jump ship?”

Drama is the public face of the Aphilliates, but he, Cannon and their third partner, DJ Sense (a k a Brandon Douglas, 26) function as a team; all three are the hosts of a weekly radio show broadcast on WHTA, an Atlanta hip-hop and R&B station, and another Gangsta Grillz show on Sirius satellite radio, and they jointly own the Aphilliates Music Group. The men have been friends since they met at college a decade ago, and they have an easy rhythm with one another, like teammates who play pickup basketball every week and can pass or negotiate a pick without making eye contact. All three wear the collective’s signature neck chain with a diamond-encrusted pendant in the shape of the letter A.

Drama, whose mother is a white education professor and whose father is a black civil rights activist, has expressive brown eyes and a closely trimmed beard. He usually wears a baseball cap backward or propped loosely atop his light brown hair, cocked to the side. Although his workday rarely starts before noon, he comes across as a savvy businessman. Most of the time he doesn’t say much, but it’s clear he is always paying close attention to what is going on around him. When he is in the studio, about to lay down a Gangsta Grillz “drop” (a phrase that is repeated throughout a mixtape), or when he has to tell a bouncer that no, he won’t stand behind that velvet rope, he rocks back and forth, building his energy, then barks out a torrent of speech, after which he seems to retreat back into himself again. He has a quiet, focused energy that can seem gruff; around Sense and Cannon, though, he gets goofy.

Cannon is a huge guy — 6-foot-6 and 250 pounds — with a lumbering gait and a sweet, unguarded smile. He sometimes spends 24 hours at a stretch in the studio, hunched over a mixing board and a computer running Pro Tools, taking breaks to play video games. He loves to shop, and he especially likes to visit high-end Atlanta malls to buy Prada cologne and examine the jewelry. His enormous sneaker collection takes up the bulk of his apartment’s walk-in closet, as well as the trunk of his Chevy Tahoe S.U.V. and most of a storage space he rents by the month.

Sense is known as the visionary with the business ideas, the one who operates mostly behind the scenes. He is short and just a little bit nerdy. Once when we were in the studio at WHTA, a D.J. named Mami Chula wandered in while a song was playing. She gave Sense a look, shook her head and mused aloud, “I just never saw someone with such a small head.” Sense didn’t say anything, just gave her an indignant look. It seemed as if he was accustomed to being teased.

The day after the raid, when Drama and Cannon were each released from jail on $100,000 bonds, they drove straight to the WHTA studios, went on the air and promoted their coming label releases. There’s a video on YouTube that shows the scene: Drama swaggers into the studio in a white T-shirt and a gray zip-up track-suit jacket, his diamond “A” chain swinging across his chest.

The D.J.’s on air were known as the Durrty Boyz, and one of them announced that they had an “exclusive interview to find out what the hell is going on with Gangsta Grillz.” He asked the accused felons to get close to the microphone.

Cannon murmured: “It’s Don Cannon. Holla at me.”

DJ Sense, who also goes by the name Trendsetter, said: “Yeah, yeah, you know what it is. The boy T-t-t-t-t-t-trendsetta! Holla at your boy!”

Drama, who sometimes calls himself “Mr. Thanksgiving” because, he says, he “feeds the whole industry,” said: “Thanksgiving is every year, man. It doesn’t go nowhere. Do you understand what that means? It’s a holiday, it’s every year. . . . It’s not going nowhere. DJ Drama! I am in full effect.”

After the Durrty Boyz spun a Ying Yang Twins song, Drama took calls at a rapid clip, and he responded to nearly every question or message of support with a reminder of the Aphilliates’ coming Gangsta Grillz release on Atlantic.

One female caller, particularly incensed, demanded, “Can I speak to Drama?”

“What’s up?” Drama asked. “What’s good?”

“Drama, what happened? . . . I mean, come on now, you went to jail?”

“I mean, for a quick minute,” Drama replied. “I am home, though.”

“Uh-uh! We ain’t having that. Don Cannon, Trendsetter, do I need to fight somebody?”

“We’re gonna need you,” Drama said. “We’re gonna start a whole campaign. . . . You know the Gangsta Grillz album is coming out, right?”

“Oh, for real?”

In 1996, Sense and Drama, then both freshmen majoring in mass communications, met in Brawley Hall, their dorm at Clark Atlanta University. C.A.U. is part of the country’s largest consortium of historically black colleges, directly abutting Morehouse and Spelman. Drama and Sense were both aspiring D.J.’s, and they were both from Philadelphia. After they met, they competed in a local D.J. battle and became friends. The following year they met Cannon, also a D.J. from Philadelphia (“Aphilliates” combines the Phil of Philadelphia with an A for Atlanta), and the three became inseparable. Each D.J. found his own niche: Sense interned at WHTA, Cannon spun records at college parties and Drama started selling his own mixtapes. Every night in his apartment, Drama made 10 copies of his latest cassette, and the next day he brought them to campus. Between classes, he would set up a cheap yellow boom box on a major promenade at C.A.U. known as the Strip and offer tapes for sale. He also sold tapes at Georgia State, where he would tell customers that the identity of DJ Drama was a mystery. “I’d tell them I never met Drama, I don’t know the guy, I just work for him,” he told me.

In his junior year, in 1998, Drama put together a compilation of Southern hip-hop, which was beginning to emerge nationally as a distinct sound and style. Often called dirty South, it was more dance-oriented and melodic and raunchier than hip-hop from either coast. That mixtape, “Jim Crow Laws,” sold well, and Drama decided to start a Southern series, which he named Gangsta Grillz. Amateur mistakes were made early on — “we actually spelled ‘Grillz’ with an S,” Drama recalled — but the series quickly took off. Through Sense, Drama met a young local rapper named Lil Jon, who had helped invent a frenetic new style of hip-hop known as crunk. Drama asked Lil Jon to be the host of a mixtape, and Jon did a manic series of drops throughout Gangsta Grillz No. 4. It was the first CD that Drama was able to get into stores.

Around the time Drama was hitting his stride, a young entrepreneur named Jason Geter was working as a manager for T.I., then a little-known artist from Atlanta’s Bankhead housing projects signed to an imprint of Arista. Geter wasn’t happy with the label’s marketing of T.I.’s first album, so he undertook his own promotions, independently shooting a video and printing up T-shirts. Geter said that he started seeing Drama’s mixtapes everywhere — in barbershops and record stores. (“Drama was the most consistent guy doing mixtapes in Atlanta,” he told me. “Some of the other people didn’t even have covers for the CDs, but Drama stood out.”) One night Geter called Drama and asked if he could bring T.I. by Drama’s home studio to do some drops and freestyles on a mixtape.

Drama was ecstatic. “At that point, no one was really checking for me,” he told me. “I hadn’t had a call in three months.” After the impromptu recording session, Geter started giving Drama unreleased T.I. songs and eventually asked him to produce and release a whole CD of T.I.’s work. When T.I.’s mixtape “Down With the King” sold well, other managers started taking their artists to Drama’s studio. The first mixtape Drama was paid by a label to produce was “Tha Streetz Iz Watchin,” which Def Jam’s CTE label hired him to make with Young Jeezy in 2004, in order to build up hype for a coming CD. When Jeezy’s official release, “Let’s Get It: Thug Motivation 101,” came out in 2005, bearing a bonus track from the Drama mixtape, it sold two million copies.

At least once a week last fall, Jason Brown, the 30-year-old promotions director for the Aphilliates, could be found making a circuit of Atlanta with boxes of Drama’s new releases stacked in the back of his Chevy Tahoe. The trip often took as long as nine hours. The Thursday I rode with Brown, he was carrying copies of two mixtapes Drama had recently recorded in the studio with Lil Keke and Lil Boosie, who are popular in their home regions — Louisiana and South Texas, respectively — but have not yet broken out nationally. Brown drove down the parkways and roads of Atlanta’s low-income black suburbs, past a landscape of Waffle Houses, custom rim shops and halal meat stores, stopping in with his wares at flea markets and little mom-and-pop record shops.

At around 3 p.m., we pulled into the parking lot of Backstage Records, a small, tidy shop across the street from the Greenbriar Mall, a locale frequently mentioned in hip-hop lyrics. (Ludacris: “Any charges set against me, chunk it up and stand tall/Next year I’m lookin’ into buyin’ Greenbriar Mall.”) Brown tucked a stack of CDs under each arm and headed into the store. He greeted the owner, a short broad man in his late 20s named Vic XL.

“How many you want?” Brown asked XL, holding out the Keke and Boosie CDs.

“Whoa!” XL said, excited. “Boosie is overdue for a mixtape.” XL told me that Boosie’s major-label release, “Bad Azz,” on Asylum Records, was not selling well, but, he explained, “he’s a hood artist,” so that wasn’t a big surprise.

XL inspected both discs and placed his order: “I’m gonna take five.” As Brown started to count CDs off his pile, XL looked again at the liner notes and reconsidered: “No, 10 each.”

A small record store like Backstage rarely orders more than 10 copies of any CD, and Drama’s distribution system meets XL’s needs better than the mainstream distribution system does. If XL wants just 10 copies of the new Lil Scrappy CD, he can’t buy them directly from the label’s distributors as chains like Best Buy do. Instead, he has to go through a middleman called a one-stop, which charges XL $10.75 for a CD that retails at Best Buy for $9.99.

The economics of mixtapes appeal to XL, and so do their politics; as he sees it, mixtapes undermine the power of major record labels and radio stations. “Most artists can’t afford to get their music on the radio, but an artist has the right to let his fan base hear what he’s done,” XL said. “Who is the label to dictate how to feed the fan base?”

Mixtapes have long played an important role in hip-hop. In the late 1970s, before rap music was ever recorded onto vinyl or played on a radio station, people found out about hip-hop acts through live recordings of D.J. sets from block parties or clubs. Those cassette recordings were duplicated by hand and sold on the street or in record stores, and given free to gypsy-cab drivers in the Bronx as promotional tools. Throughout the ’80s and ’90s, mixtapes remained an important subculture. In the last five years, though, they have risen to a more prominent place in the industry and made the most successful D.J.’s rich.

Mixtapes fill a void left by the consolidation of record labels and radio stations. In the mid-1990s, sales of independent hip-hop albums exceeded those from major releases. But those smaller independent labels were bought out by major labels, and in the late ’90s, the last major independent distributor collapsed. This left few routes for unknown hip-hop artists to enter the market; it also made the stakes higher for major labels, which wanted a better return on their investment. As Jeff Chang, author of “Can’t Stop Won’t Stop,” a history of hip-hop, told me recently, “The whole industry shifted to massive economies of scale, and mixtapes are a natural outgrowth and response to that.”

Mixtape D.J.’s came to be seen as the first tier of promotions for hip-hop artists, a stepping stone to radio play. Labels began aiding and abetting mixtape D.J.’s, sending them separate digital tracks of vocals and beats from songs so they could be easily remixed. They also started sending copies of an artist’s mixtape out to journalists and reviewers along with the official label release. DJ Chuck T, a mixtape D.J. in South Carolina, told me that when label employees send him tracks to include on his mixtapes, they request a copy of the mixtape so that they can show their bosses the track is “getting spin from the street.” He also said record-label promoters want sales figures for his mixtapes so they can chart sales patterns, which they use in marketing their own releases.

Mixtape D.J.’s have effectively absorbed many of the functions of an A&R department, the branch of a record label that traditionally discovers and develops new talent. Ron Stewart, a promotions coordinator at Jive Records, a subsidiary of Sony BMG Music, told me he prefers to test new artists out on mixtapes. “Budget permitting,” he said, “we’d do a few mixtapes with a few D.J.’s, because they have different audiences in different regions.” Labels prefer to use established mixtape D.J.’s like Drama, rather than produce promotional CDs themselves, Stewart said, because “the best D.J.’s have a better brand than the average label does.”

Although the deals are informal and often secret, labels typically pay a prominent D.J. like Drama $10,000 to $15,000 to produce a mixtape for an artist. The label’s representatives, Stewart explained, adopt what amounts to a don’t ask, don’t tell policy about the D.J.’s plans to sell the work; what the D.J. does with his copy of the master, Stewart said, “is his own business.” For successful D.J.’s, mixtape sales can bring considerable revenue. Mixtapes sell for anywhere from $5 to $10 on the street or on a Web site like Mixunit, and overhead is low, since the CDs cost only about 50 cents to manufacture and D.J.’s rarely pay royalties or licensing fees.

Although many hip-hop artists view mixtapes as an essential way to build their careers, some are critical of aspects of the system. One editor of a hip-hop magazine, who would comment only anonymously, told me: “In the aftermath of the raid, talking to artists, the stuff they say when Drama’s not around — there is a little bit of animosity, because he is clearly making money off these artists. They all saw his car being towed off on TV. What was it? A Maserati?”

Killer Mike, an Atlanta rapper who is signed to Sony and who has been featured on a number of DJ Drama’s mixtapes, told me he is not really a “supporter” of mixtapes. “That doesn’t mean I don’t play mixtapes in my car and listen to other peoples’ mixtapes, but as an artist, I feel the amount of rhymes you have to write to put out a mixtape is the same amount you have to for an album,” he said. “I’d rather put out albums over my own beats than use other people’s beats and have a problem later.”

Pimp C, a Texas rapper who is half of the popular underground hip-hop duo UGK, has repeatedly refused to participate in a UGK mixtape despite requests by his record label and, he said, from countless mixtape D.J.’s. Pimp C told me that because there is no paper trail, mixtape D.J.’s are able to invent sales figures, and they routinely claim that, after their overhead, they just break even. But based on his experience producing two of his own mixtapes, Pimp C suspects D.J.’s make plenty; they just don’t want to give artist a cut. “Every time I was approached by a mixtape D.J., they tried to sell me the dream there was no money in it, and it was something artists need to do to help their album sales,” he said. “But I know how much bread can be made. . . . If you’re making money, chop it up with me.”

Before DJ Drama went to jail, no mixtape D.J. had been the target of a major raid; busts had been directed at small retailers, like Mondo Kim’s in New York’s East Village. Jonathan Lamy, a spokesperson for the R.I.A.A., said the raid on Drama’s studio represented no official change in policy and had been undertaken only at the behest of Atlanta law enforcement. But for many in the industry, the focus on a single prominent figure seemed like no accident. “Arresting them criminally under RICO was firing a warning shot at anyone who has mixtapes,” said Walter McDonough, a copyright lawyer who has negotiated with the R.I.A.A. on behalf of Jay-Z.

Others pointed to the selective nature of the crackdown as evidence that the raid was a deliberate effort — major retailers like Best Buy were not raided, even though they carry many of the same CDs Drama was arrested for selling. The R.I.A.A. “would have to know nothing about the industry they are monitoring not to realize this stuff is all over Best Buy and FYE,” says Eric Steuer, the creative director of Creative Commons, a nonprofit that works to develop more flexible copyright arrangements for artists and producers. “Maybe they leave them alone because the major chains have promotion deals with record labels.”

Ted Cohen, a former executive at EMI Records who now runs a music-consulting business, told me that the raid was typical of the music industry’s “schizophrenic” approach to promotions; a label’s marketing department wants to get its artists’ songs in front of as many people as possible, even if it means allowing or ignoring free downloads or unlicensed videos on YouTube. But the business department wants to collect royalties. “It is a case of the right hand not knowing what the left hand is doing,” Cohen said.

Drama’s arrest shook up mixtape D.J.’s and promoters across the country. But even in the days immediately following the raid, D.J.’s continued to release tapes — some with hastily added tracks on which rappers cursed the R.I.A.A. — and major labels continued to e-mail them new tracks. Some in the industry speculated that things would have to change, that mixtapes would either move further underground or become legitimate licensed products. But no one I spoke with thought the arrest would permanently damage Drama’s career. In fact, Julia Beverly, the editor of Ozone, a Southern hip-hop magazine, suggested that it was more likely to improve his image and album sales. “Really, this takes him to a gangsta level,” she said. “It gives him a little something extra. It’s messed up, but if someone goes to jail or dies, it elevates his status and just makes him more of a star than he was before. That’s the way the entertainment industry works in general. So, having cops at your door with M-16’s at your head, and MTV News reporting on the raid, calling you the biggest D.J. in the world? You can’t pay for that type of look.”
http://www.nytimes.com/2007/02/18/ma...djdrama.t.html





New Weapon in Web War Over Piracy
Brad Stone and Miguel Helft

As media companies struggle to reclaim control over their movies, television shows and music in a world of online file-sharing software, they have found an ally in software of another kind.

The new technological weapon is content-recognition software, which makes it possible to identify copyrighted material, even, for example, from blurry video clips.

The technology could address what the entertainment industry sees as one of its biggest problems — songs and videos being posted on the Web without permission.

Last week, Vance Ikezoye, the chief executive of Audible Magic in Los Gatos, Calif., demonstrated the technology by downloading a two-minute clip from YouTube and feeding it into his company’s new video-recognition system.

The clip — drained of color, with dialogue dubbed in Chinese — appeared to have been recorded with a camcorder in a dark movie theater before it was uploaded to the Web, so the image quality was poor.

Still, Mr. Ikezoye’s filtering software quickly identified it as the sword-training scene that begins 49 minutes and 37 seconds into the Miramax film “Kill Bill: Vol. 2.”

The entertainment industry is clamoring for Internet companies to adopt the technology for music files as well as for video clips. The social networking site MySpace, owned by the News Corporation, said last week that it would use Audible Magic’s system to identify copyrighted material on its pages. But not every Internet company is rushing to go along. The video-sharing site YouTube, which Google bought last year, is the major holdout so far.

Though YouTube’s co-founders said publicly that they would start using filtering technology by the end of last year, the site has yet to do so. And they have further angered some media companies by saying they would only use such technology to detect clips owned by companies that agree to broader licensing deals with YouTube.

The pressure is on. Executives at media companies like NBC and Viacom have criticized Google for the delay. Earlier this month, Viacom asked YouTube to remove 100,000 clips of its shows, like music videos from MTV and excerpts from Comedy Central’s “The Daily Show.”

In a statement, YouTube said that identifying which video clips had been uploaded without permission was a complex problem that required the cooperation of the copyright owners. “On YouTube, identifying copyrighted material cannot be a single automated process,” it said in the statement.

The systems being developed by companies like Audible Magic and Gracenote make use of vast databases that store digital representations of copyrighted songs, TV shows and movies.

When new files are uploaded to a Web site that is using the system, it checks the database for matches using a technique known as digital fingerprinting. Copyrighted material can then be blocked or posted, depending on whether it is licensed for use on the site.

“This is capable of helping the film and TV studios comprehensively protect their works,” Mr. Ikezoye said. “This could put the genie back in the bottle.”

Audio fingerprinting technologies have been used successfully for some time to detect copyrighted music on file-sharing networks and, to a smaller degree, to identify music tracks on social-networking Web sites like MySpace.

Systems that can identify video files hold even greater promise to improve relations between traditional media companies and Internet companies like YouTube. But the technology is not quite ready.

“Video is much more complex to analyze, and more information needs to be captured in the fingerprint,” said Bill Rosenblatt, president of GiantSteps Media Technology Strategies, a consulting firm based in New York. He noted that there were also more ways to fool the technology — for example, by cropping the image.

Screening for video is also more difficult because of the sheer volume of new material broadcast on television each day, all of which must be captured in the database.

And deploying any type of fingerprinting technology can carry a price. Users tend to leave filtered Web sites and migrate to more anything-goes online destinations.

Nevertheless, some file-sharing networks and smaller video sites like Guba.com and Grouper.com are already using more basic filters that monitor video soundtracks and music files, hoping to appease copyright holders and stay out of the courtroom.

Last week, they got some company: MySpace announced that it would expand on early filtering efforts and license Audible Magic’s audio and video fingerprinting technology. It will use the system to identify and obtain authorization for material from Universal Music, NBC Universal and Fox, three media companies that have wanted more control over their content on the site. The move ratchets up the pressure on YouTube, the largest video site on the Web.

Hollywood, long tormented by digital piracy, is growing excited about the possibilities of digital fingerprinting and filtering — in part because it is tired of having to ask YouTube and other sites to remove individual clips, only to find them posted again by other users.

“To the extent you can readily and easily identify one film or TV show from the next, it enables different licensing models and the opportunity to protect your content,” said Dean Garfield, executive vice president of the Motion Picture Association of America.

For now, however, audio fingerprinting is all that is widely available, and it can fall short in some situations, like when someone pairs a song with an unrelated piece of video.

For example, last December, one YouTube user uploaded scenes from the Warner Brothers movie “Superman Returns,” matched to the song “Superman,” by Five for Fighting of Columbia Records, a unit of Sony BMG Music.

With acoustic fingerprinting, Sony could authorize the use of the song and get a slice of the advertising revenue the clip generates, but Warner Brothers could not because the filter does not scrutinize video images.

Hoping to nurture the development of more advanced video fingerprinting, the film association asked technology companies last fall to submit video filtering systems for testing. Mr. Garfield of the association said 13 companies responded; their systems are now being evaluated.

Perhaps not surprisingly, there is now a flurry of interest in digital fingerprinting in Silicon Valley. Sean Varah, an electronic-music researcher who once worked for Sony music’s venture capital group, founded the start-up MotionDSP in 2005 to develop technology to improve the quality of video images. But he changed the company’s direction last year after seeing an opportunity in the filtering business.

“The television and movie producers have learned a lesson from Napster,” he said, referring to the music-sharing service that first got the attention of media companies. “They are not going to wait and see what happens.”

Attributor, another start-up based in Redwood City, Calif., is taking a different approach to filtering. It is developing automated software that will travel the Internet looking for copyrighted text, audio and video.

Setting up filters for each and every Web site and peer-to-peer network “is not a long-term solution,” said Jim Brock, a former Yahoo executive and the chief executive of Attributor. Rights holders “need to have these kinds of solutions across the Internet,” he said.

Audible Magic, which is considered to be an early leader in the field, started out with a system to recognize songs played on the radio, so it could offer listeners an opportunity to buy the music online. The company later adapted that technology to create an audio fingerprinting system.

Mr. Ikezoye, a former Hewlett-Packard marketing executive, recently set out to expand into video recognition. Last year, he licensed an invention called Motional Media ID, created by David W. Stebbings, a former executive at the Recording Industry Association of America.

Neither Mr. Ikezoye nor Mr. Stebbings would offer details on Motional Media ID (which identified the “Kill Bill” clip), citing the newly competitive environment around digital fingerprinting. Mr. Ikezoye acknowledged that it did not work well for very short clips and said that he would probably have to buy or develop additional technology.

Deploying any type of fingerprinting filter can have both good and bad effects. Guba.com, a video-sharing site similar to YouTube, developed its own filtering system, which it calls Johnny. Having won the favor of the film industry, the company now has deals to sell Warner and Sony films on its site.

But when Guba began blocking many copyrighted clips last April, its popularity plunged.

“We took a huge hit,” said Eric Lambrecht, Guba’s chief technology officer. “We all know what people want to see, but we looked at it as a long-term business decision.”

Some experts believe wide adoption of the technology is inevitable.

“As technology companies mature, they are realizing that the rule of law is better than the anarchy in which they were formed,” said Paul Kocher, chief executive of Cryptography Research, a company that has studied the security of digital fingerprinting technology.
http://www-tech.mit.edu/V127/N5/webpiracywire.html





iTunes Versus Pirating

I’ve purchased a number of things from the iTunes Store. Music and TV shows primarily, and I’ve been pretty happy with the ease of use and quality of my purchases… The problem i have, though is that television shows such as Lost, which are broadcast in a 16×9 aspect ration HD, when purchased from the iTunes Store, are only 4×3. This apparently only applies to ABC shows.

As you can see in the above image, by purchasing the episode from iTunes rather than just pirating it, i actually get less of the show. …and to be honest, pirating this episode took maybe 2 to 3 minutes more work.

The downfall of pirating, though, is that iTunes (and therefore most likely AppleTV) doesn’t not play friendly with DIVX, but then on the plus side, there’s no DRM. I can convert my pirated copy to any format i want, burn it to DVD, extract clips, scrub through frame-by-frame, etc.

Sounds to me like legality, and even the convenience of auto-downloads, are having a hard time competing with pirating.

But what it really comes down to for me is this: If i get LESS INFORMATION from my legal purchase, if i cant even get widescreen (much less HD) then why should i be purchasing instead of pirating?

I’ve sent Apple an email letting them know that i am dissatisfied with my purchase, that i believed it to be misrepresented product, that no where on the iTS does it tell me that my purchased copy of the season is a stripped down, cut off version of the show. I’ve asked for a refund.

I’d much rather legally purchase the season, i’d much rather they just give me an alternate download link for the 16×9 version, but we’ll see how they respond.

It doesn’t seem like a stretch for Apple to start selling at least 720p versions of their video offerings. It should happen soon, but until then, i do not want to pay full price for only 4/5ths of the show.
http://the-ish.com/blog/?p=18





Music Labels Offer Teasers to Download
Jeff Leeds

For all the disquiet the Internet has fostered in the music business, almost every rock star and record executive is intrigued with the prospect of marketing to music fans directly instead of wrangling for exposure with radio programmers or retailers.

But the expansion of the online marketplace, coupled with ever-worsening CD sales, is now all but forcing the music companies to tread on ground they once viewed as off limits.

Starting this week, Suretone Records, a label distributed by the Universal Music Group, plans to distribute video files featuring popular acts like Weezer and new bands like Drop Dead Gorgeous on file-sharing networks that the industry has long viewed as illicit bazaars for pirates.

Unlike the music audio and video files that major labels sell at services like iTunes, the video files will not be wrapped in protective software to limit copying, executives say. But they will also be incomplete: users who download them will see perhaps half the video and will be directed to the label’s own Web site to watch the complete version — and the advertising planned to run alongside.

The plan represents one of the latest signs that, after years of suing individual users and file-swapping services, the recording industry is recognizing that it might have to loosen its control to attract the giant audience found in largely unregulated corners of the Internet.

And there is new reason for urgency. The music business has been buckling beneath the pressure of widespread piracy and plunging sales. Album sales declined 5 percent last year, and the scarcity of hits after the holidays has put the industry on a course to fall behind even last year’s lackluster performance.

Sales for the year so far are down more than 15 percent, according to Nielsen SoundScan data. That has brought a profit warning from one music corporation, the EMI Group, and prompted dire forecasts industrywide.

Digital sales are increasing, but not nearly enough to offset the drop. As a result, many executives are searching for other ways to reach the people who are trafficking in music and other media files in free file-sharing networks and on social networking sites like MySpace and Facebook.

But how far the industry should go to appeal to them is now the subject of intense debate.

One big issue is whether the four music conglomerates that dominate the industry should drop copy protection software, known as digital rights management, from the music files they license for sale online.

The industry has already been dabbling in unprotected content, allowing the sale of songs from artists like Norah Jones, Jessica Simpson and Jesse McCartney on Yahoo and other sites.

An array of online music retailers has called for doing away with the software completely. Steven P. Jobs, the chief executive of Apple, whose iTunes music store is the most powerful of the those retailers, recently added his voice to the chorus, arguing that digital rights management has not halted piracy and that the industry’s main format, the compact disc, carries unprotected files.

EMI has discussed the idea of distributing unprotected music files with certain retailers, but there is little indication that the four companies, which control more than 70 percent of the world’s music sales, will be willing to offer much of their catalogs without such software anytime soon.

Still, there are indications that the record labels are re-examining their practices. RCA Records, for example, plans to advance its promotional campaign for Avril Lavigne’s new album with the first in a series of short manga — Japanese comic-book episodes — in a storyline featuring the singer.

The video clips, which run two to three minutes each, are expected to be released in unprotected form as free podcasts on iTunes, among other outlets. Fans will also be able to use special software, probably offered on a label’s Web site, to take snippets of the episodes and rearrange them, executives said.

Terry McBride, a longtime talent manager who represents Ms. Lavigne and other performers, said the campaign was a rare instance of a major label’s agreeing to an uncontrolled release, and that he fully expected fans to post the clips on file-sharing networks. “This becomes public property,” he said. “We’re not going to tell the consumer how to consume.”

But Mr. McBride predicted that sharing the files would promote the album and set the stage for other ventures, including the sale of higher-quality versions of the video clips, or possibly advertising to go along with them. In any event, he added, the more CD sales suffer, the more pressure will build on record labels to rethink the rules of distribution and to drop limits on copying digital music.

“At the end of the day the whole object should be, let’s fix the problem,” said Jordan Schur, who set up the Suretone label last year as a joint venture with Universal after leaving another Universal label, Geffen Records. “We know people are stealing music. We’re not going to sit in judgment of them and say, ‘Well, they’re bad.’ ”

The label’s files are being distributed online in an arrangement with ArtistDirect’s MediaDefender unit, which is better known as a contractor hired by labels to place fake, or decoy, versions of songs or other media files on file-sharing networks to thwart would-be pirates.

Before the Suretone video deal, the company had also begun planting fake files containing promotional messages for advertisers like Coca-Cola. ArtistDirect separately runs one of the most popular music Web sites on the Internet, ArtistDirect.com, and plans to have a channel there devoted to Suretone’s video clips.

Record labels are not shifting their view toward file-sharing across the board. Executives at Geffen recently found themselves at odds with the rap star Snoop Dogg, for example, after he started selling songs in unprotected form on his MySpace page, in a partnership with a San Francisco-area rap entrepreneur. Snoop Dogg also offered to sell other performers’ songs on his page for a fee, a complete “push and promote” package costing $1,500.

The offer was removed last week after The New York Times inquired whether it conformed to MySpace’s terms and conditions, which generally prohibit users from selling space on their pages to outsiders.

A number of independent artists offer their songs on MySpace. The reggae act Shaggy charges 99 cents a song, for example, and the band Barenaked Ladies charges 83 cents.
http://www.nytimes.com/2007/02/19/te...y/19music.html





Saying You Can't Compete With Free Is Saying You Can't Compete Period

Getting back to my series of posts on understanding economics when scarcity is removed from some goods, I wanted to address the ridiculousness of the "can't compete with free" statements that people love to throw out. If we break down the statement carefully, anyone who says that is really saying that they can't compete at all. The free part is actually meaningless -- but the zero is blinding everyone.

To explain this, it helps to go back to your basic economics class and recognize that, in a competitive market, the price of a good is always going to get pushed towards its marginal cost. That actually makes a lot of sense. As competition continues, it puts pressure on profits, but producers aren't willing (or can't for very long) keep selling goods at a direct loss. Sunk (or fixed) costs don't matter, because they've already been paid -- so everything gets pushed to marginal cost. That's pretty well accepted by most folks -- but it's still misinterpreted by many. They tend to look at it and say that if price equals marginal cost, then no one would ever produce anything. That's a misconception that is at the heart of this whole debate. The problem is that they don't add in the element of time, and the idea that what drives innovation is the constant efforts by the producers in the space to add fleeting competitive advantages (what some economists have annoyingly called "monopolistic competition," a name that I think is misleading). In other words, companies look to add some value to the goods that makes their goods better than the competition in some way -- and that unique value helps them command a profit. But, the nature of the competitive market is that it's always shifting, so that everyone needs to keep on innovating, or any innovation will be matched (and usually surpassed) by competitors. That's good for everyone. It keeps a market dynamic and growing and helps out everyone.

So, let's go back to the "can't compete with free" statement. Anyone who says that is effectively saying that they can't figure out a way to add value that will make someone buy something above marginal cost -- but it's no different if the good is free or at a cost. Let's take a simple example. Say I own a factory that cost me $100 million to build (fixed cost) and it produces cars that each cost $20,000 to build (marginal cost). If the market is perfectly competitive, then eventually I'm going to be forced to sell those cars at $20,000 -- leaving no profit. Now, let's look at a different situation. Let's say that I want to make a movie. It costs me $100 million to make the movie (fixed cost) and copies of that movie each cost me $0 (marginal cost -- assuming digital distribution and that bandwidth and computing power are also fixed costs). Now, again, if the market is competitive and I'm forced to price at marginal cost, then the scenario is identical to the automobile factory. My net outlay is $100 million. My profit is zero. Every new item I make brings back in cash exactly what it costs to make the copy -- so the net result is the same. It's no different that the good is priced at $0 or $20,000 -- so long as the market is competitive.

So why aren't the same people who insist that you can't compete with free whining about any other competitive market situation? Because they know that, left unfettered, the market adjusts. The makers of automobiles keep trying to adjust and differentiate their cars through real and perceived benefits (such as brand) -- and that lets them add value in a way that they can make money and not have to worry about having products priced at marginal cost. If a company can't do that, it goes out of business -- and most people consider that a good thing. If you can't compete, you should go out of business. But, when it comes to goods with a $0 marginal cost, even though the net result is identical to goods with a higher marginal cost, suddenly people think that you can't compete? The $0 price makes no difference. All that matters is the difference in price you can charge to the marginal cost. Everyone else learns to differentiate -- why can't those who produce infinite goods do the same?

The answer is that they already do -- even if they don't realize it. Why do movies still cost more than $0? Because there's additional value bundled with the movie itself. People don't buy "a movie." They buy the experience of going to the theater. People like to go out to the movies. They like the experience. Or people buy the convenience of a DVD (which is another feature bundled with the movie). They like to buy DVDs (or rent them) in order to get the more convenient delivery mechanism and the extra features that come with DVDs. In other words, they like the differentiated value they can get from bundled goods and services that helps justify a price that's more than $0. Just as people are willing to pay more than the marginal cost (in some cases a lot more) to get that car they want, they're willing to pay more for a bundled good or service with content -- if only the makers of that content would realize it.

So the next time someone says "you can't compete with free" ask them why? Every company that's in business today competes with those who aim to undercut the price of their product -- and the situation is absolutely no different when it's free. It's just that people get blinded by the zero and forget that the absolute price is meaningless compared to the marginal cost.
http://www.techdirt.com/articles/20070215/002923.shtml





Do They Still Want Their MTV?
David Carr

MTV prospered for decades because it looked like what a network might look like if a 16-year-old were doing the programming. But now the music channel is trying to make its way in a multidevice, multiplatform, multichannel world, most of which is being programmed by a 16-year-old.

The velocity of change has left MTV occasionally looking as if were being programmed by an 83-year-old — namely Sumner M. Redstone, the chairman of Viacom, which owns MTV. The network, itself a stately 25 years old, has suffered a decline in ratings and cultural cachet.

Last week, MTV Networks, an umbrella which includes MTV, VH1, Comedy Central and Nickelodeon, laid off 250 employees, including some executives. The idea was to trim bodies in the television ranks and ramp up hiring on the Internet side of the business, investing the savings to make sure that its various channels don’t end up like the dad in the basement at the teen party.

As a brand, MTV has been beyond durable, managing to reinvent itself continuously and in doing so presenting a fast-moving target that left many would-be rivals in its wake. Shows like MTV’s “Real World” deserve much of the credit, or blame, for demonstrating that reality can make for compelling viewing.

But finding the edge was simpler before competition for its core demographic started coming from all fronts, from video games and social-networking Web sites to amateur clips on YouTube. And consumers can use the Web to come up with their own reality narratives — the current transformation of Britney Spears from pop superstar to bald alien is pretty tough for anyone to compete with.

Being the coolest thing on television is a feat, but not one with a lot of future when most of the coolest things no longer live there.

MTV has been madly programming screens of all sizes and looking to engage consumers on whatever device they choose, but it has been slow going. Rising above the clutter was a lot easier when we were all staring into the same campfire.

“It’s true that our viewers are telling us that they want an experience beyond linear television,” said Christina Norman, MTV’s president. “MTV has a history of surrounding the consumer with both long-form and interstitial content, and I think we can deliver on a two-way relationship with our audience.”

She suggested that there were few media brands better-suited to coming up with content for cellphones and added that the virtual communities around shows like “Laguna Beach” have created opportunities for both viewers and advertisers.

The so-called music channel left music behind as a sole platform some time ago, instead relying on reality and lifestyle shows to draw in young audiences. But it nonetheless remains in the business of zeitgeist.

In a sense, the change in the musical ecosystem reflects broader challenges. Not that long ago, a band fought its way to a major label contract, benefited from commercial radio play and then, finally, a video on MTV. But this system has been disrupted by entertainment’s new iterations, and now most bands no longer ride a vertical axis to the top. There are various workarounds to the popular music monolith — online file-sharing, viral marketing, niche sites and social networks help bands market their music from one person to another.

It is all well and good that OK Go, the band-as-music-video-sensation, chose to premiere its video “Do What You Want” on “Total Request Live,” MTV’s once-dominant afternoon show, but it is worth remembering that OK Go emerged to begin with from YouTube, where its goofy treadmill video became a cult classic.

In a sense, MTV, which once decided what was worthy, is responding to a more powerful consumer algorithm. (Ms. Norman points out that OK Go did not start selling a significant amount of music until the band began appearing on MTV.)

The disintegration of mass has made for difficult times at MTV Networks, although there are bright spots. VH1 continues to hum with a heady mix of “celeb reality” like “Flavor of Love” and shows like “Best Week Ever” that annotate the present with the ease of a well-written blog. VH1 does not bear MTV’s burden of serving as a generational touchstone, so it can program whatever happens to be working.

The organizational changes at the network signal that even MTV can learn some best practices from other members of the corporate family. Marketers I spoke to said that it was the once-dowdy VH1 that seemed to have the fresher ideas. And Comedy Central, which lacks both the legacy and the baggage that MTV carries, is very much of the moment, lead by a skeptic-in-chief, Jon Stewart.

“MTV has come in and out of vogue, like most cutting-edge brands,” said Tim Spengler, chief activation officer of Initiative, a media buying firm. “But they have done a great job of being in vogue more often than not. The changes that they announced seem a lot more like the redeploying of assets to digital platforms that are growing faster.”

MTV is hardly the only media company in a wrestling match with a fast-advancing future. NBC and Disney both underwent painful changes, although it seemed like there was a bit more strategy to go along with the displacement.

MTV Networks brought in Michael J. Wolf, the former McKinsey consultant, to lead it to that happy new place, but he lasted little more than a year as president, in part because the formerly cutting-edge outfit was hidebound enough to reject the attempted transplant of outside ideas.

In general, Viacom has been attempting to dance to the fickle tune of Wall Street, first bifurcating into two businesses as a way of juicing the stock, and then, when that did not work, dumping much-beloved executive Tom Freston. This worked a little, although Viacom’s stock closed Friday at $40.53, off more than $3 from its presplit price.

Like all publicly traded media companies, Viacom faces the perplexing math of repositioning for a disrupted future while trying to meet current shareholder demands for growth.

Solving the multiplatform math will take a long-term slog and will not help meet Mr. Redstone’s demand for high margins in the short run. Instead, the investment in Internet is being financed in part by the cutbacks that were announced last week.

One example of how MTV has obviously lost a step is the Video Music Awards, an alternative to the Grammys that was once a big pop culture moment and is now an artistic and a ratings flop.

The show was down 30 percent in the 18-to-49 demographic last year, and the company announced last month that Mark Burnett, the creator of “Survivor,” will bring some reality magic to its movie awards show.

Mr. Burnett has had his share of successes, but the idea that MTV would have to turn to an outsider to bring some sizzle to one of its signature events suggests that its stranglehold on youth consciousness is not what it once was.

Even the most robust media brands can come and go. Dennis Publishing, which produced Maxim and Stuff, the so-called lad magazines that were once hugely popular, announced last week that it was looking for a buyer.

MTV is hardly a fad, but some cycles are more serious than others. It is a change in habits — consumers pulling in what they want as opposed to consuming what is pushed toward them — that makes the way forward more difficult to discern.

“MTV has a lot of programming development that sounds interesting,” said Chris Boothe, president of Starcom USA, an advertising agency. “They have a brand that is still very viable in the market” and have been trying to make the most of it with acquisitions like iFilm, a Web video site, and Xfire, a gaming site, Mr. Boothe said.

Of course, clanging the death knell on MTV has been a hobby for media observers as long as the music channel has existed, but when the smoke cleared, those three letters were still there.

“I think that something that has managed to win for 25 years will continue to do so, ” said Mr. Spengler. “If they just had five years behind them, that would be different, because the challenges they face are ferocious. But they have been finding a way to win for a lot longer than that.”
http://www.nytimes.com/2007/02/19/bu...ia/19carr.html





FCC Report: TV Violence Should be Regulated

• FCC draft report suggests TV violence be regulated
• Not red state or blue state issue, says commissioner
• Idea raises First Amendment questions

Television networks are free to sprinkle their programs with shootings, slashings, torture and other gore because the government has no regulatory authority over violent programming.

But a draft report being circulated at the Federal Communications Commission says Congress can change that, without violating the First Amendment.

The long-overdue report suggests Congress could craft a law that would let the agency regulate violent programming much like it regulates sexual content and profanity -- by barring it from being aired during hours when children may be watching, for example. (Watch why people are concerned about torture on "24")

"In general, what the commission's report says is that there is strong evidence that shows violent media can have an impact on children's behavior and there are some things that can be done about it," FCC Chairman Kevin Martin said Thursday.

The issue is bipartisan. Martin, a Republican, gave a joint interview to The Associated Press with Democratic Commissioner Michael Copps.

"The pressure to do something on this is building right now," Copps said, noting that TV violence comes up regularly during media ownership hearings he conducts across the country. "People really feel strongly about this issue all across this land. This is not a red state or a blue state issue."

The report also suggests that cable and satellite TV could be subjected to an "a la carte" regime that would let viewers choose their channels, a measure long supported by Martin.

"We can't just deal with the three or four broadcast channels -- we have to be looking at what's on cable as well" Martin said.

The report cites studies that suggest violent programming can lead to "short-term aggressive behavior in children," according to an agency source who described the report and asked not to be named because it has not yet been approved.

The recommendations are sure to alarm executives in the broadcast and cable industries, members of the creative community and First Amendment advocates.

"Will it count on the news?" asked Jonathan Rintels, executive director of the Center for Creative Voices in Media. "Will it count on news magazines like '60 Minutes' and 'Dateline'? What about hockey games when the gloves come off and people start punching each other?"

Rintels said such rules would create "huge gray areas of censored content."

"The fact that it's difficult should not take this issue off the table," Copps said, when asked about the potential difficulty.

A bipartisan group of 39 House members nearly three years ago requested a report by Jan. 1, 2005, discussing whether the FCC could define "exceedingly violent programming that is harmful to children." It also asked whether the agency could regulate such programming "in a constitutional manner."

Broadcasters are expected to object strenuously to any anti-violence regulatory regime, but have been skittish in going on the record.

Generally, broadcasters and cable companies say parents should take responsibility for what their children watch and take advantage of blocking technology, like the V-chip. Broadcasters also claim their shows are becoming edgier to keep up with increasingly violent fare on cable networks.

Dan Isett, director of corporate and government affairs for the Parents Television Council, said the industry's campaign to make parents the violence police is "purely designed to convince the Congress that they (programmers) are being responsible."

The parental blocking technologies are insufficient due to a flawed television rating system, he said. As for the argument that cable is pressuring broadcasters to be edgier, Isett believes that's nonsense.

"Virtually all content is owned by six major media conglomerates," he said. "They own what's on cable."

The commission could vote on the report at any time. Martin, Copps and Republican Commissioner Deborah Taylor Tate are expected to vote in favor. Democratic Commissioner Jonathan Adelstein was not immediately available for comment. Republican Commissioner Robert McDowell is the potential wild card.

McDowell, a father of young children, issued a statement saying he is "deeply concerned about the effects of television violence" but added the "first line of defense rests with parents."
http://www.cnn.com/2007/SHOWBIZ/TV/0....ap/index.html





Record Fine Expected for Univision
Stephen LaBaton

When Univision began broadcasting a show three years ago about the misadventures of 11-year-old identical twin girls who swapped identities after discovering they had been separated at birth, it characterized the episodes as educational programming for children.

That decision is expected to cost Univision, the nation’s largest Hispanic network, $24 million in what would be the largest fine the Federal Communications Commission has ever imposed against any company. The penalty is also expected to send a strong signal to broadcasters that they will be expected to meet their required quota of shows that educate and inform children, after years of permissive oversight in this area.

The commission has decided to impose the heavy fine — disclosed by Kevin J. Martin, the chairman of the commission, in an interview — as a tough rebuke to Univision for claiming to meet its obligations to broadcast educational children’s programs by showing the Latino soap opera “Complices al Rescate” (“Friends to the Rescue”) and other so-called telenovelas.

The penalty, part of a settlement that will allow the company to proceed with a buyout deal, is nearly three times the previous record fine of $9 million, imposed against Qwest Communications for violating telephone interconnection rules in 2004, and significantly more than the largest indecency penalty, $3.5 million, levied against Viacom that same year for remarks by Howard Stern and other so-called shock jocks on the radio.

It also represents an unusually aggressive enforcement of the 1996 regulations that interpreted the Children’s Television Act. Those regulations, adopted after some broadcasters characterized cartoons like “The Flintstones” and “The Jetsons” to be educational programs, imposed more substantive requirements on the networks as they comply with the mandate to broadcast at least three hours a week of programs of intellectual value to young people.

Although some television critics say it is common for stations not to comply, only a handful of complaints have been filed. An even smaller number have resulted in modest penalties of several thousand dollars for stations found to have violated the rules.

Reflecting the views of many policy leaders in Washington who were appointed by President Bush, Mr. Martin said that he was committed to deregulation “and an environment where companies can be investing and competing and driving innovation.” But he also said that he was not driven simply by ideology, and that there remain important areas where thorough regulation plays a valuable social role.

“I generally think consumers are better served by less regulation, not more,” he said in an interview. “But I also think the commission has a key role to play in some areas, such as children’s television, and I take those obligations seriously.”

The agency under Mr. Martin adopted new rules last year to make the children’s television programming requirements apply to new digital television stations.

The $24 million fine, along with a plan to show more programming that would comply with the rules, are part of a consent decree that Univision has tentatively agreed to that would resolve complaints by viewers. It covers violations at 24 Univision stations over a 116-week period from 2004 to early last year.

Mr. Martin has already signed onto the decree. Once the full commission approves it, as expected, Univision will be able to complete its $12 billion sale to a consortium of private equity firms. Those investors include Providence Equity Partners, where a senior executive is Michael K. Powell, the former F.C.C. chairman, and Haim Saban, a wealthy investor who built a major business on the Mighty Morphin Power Rangers action figures.

Lawyers representing Univision before the commission declined to comment about the case.

The fine was applauded by some Democrats in Congress who have long been dissatisfied with the agency for failing to press broadcasters to provide higher- quality programming for children.

“As the prime House author of the Children’s Television Act, I am pleased the commission is pursuing serious and vigorous enforcement of violations,” said Representative Edward J. Markey, the Massachusetts Democrat who heads the House subcommittee on telecommunications and the Internet. “This is a particularly egregious case and the level of the proposed fine reflects it. Rather than giving kids programming that is educationally nourishing, Univision elected to give them the Spanish-language equivalent of a soap opera..”

The case dates to the summer of 2005, when the United Church of Christ raised concerns about Univision’s programming lineup, complaining that it was failing to provide adequate children’s programs. The network claimed it was meeting its obligation by repeatedly rebroadcasting the same episodes of the telenovela. The commission’s staff found that 24 stations had violated the programming guidelines over a two-year period.

Angela J. Campbell, a telecommunications expert at Georgetown University Law Center who represents the church, appeared stunned by the decision.

“Assuming it’s true, I’m pleased to see the commission finally taking action and I hope they will take action soon on other petitions we have filed in this area,” Professor Campbell said. “Broadcasters need to know that they have to take these obligations to children seriously.”

Univision had maintained that it satisfied its programming obligations for children by broadcasting several telenovelas, including “Complices al Rescate”

“A significant purpose and key educational objective of this program is to illustrate how friendship, love and kindness can help overcome life’s adversities,” the network’s lawyers said in their brief before the commission. “ ‘Complices al Rescate’ follows the lives of two 11-year-old girls, Silvana and Mariana, who have both experienced sadness, loss and injustice in their lives. Throughout the shows, the girls learn to appreciate that happiness is not found in popularity and money, but in true friendship, good will towards others and love.”

But Mr. Martin said the commission found little merit to that argument, and critics said the show, with complex subplots and occasional adult themes, had little value for young children.

In an affidavit accompanying the United Church’s complaint, Federico Subervi, a media consultant to such shows as “Dora the Explorer” and “The Misadventures of Maya and Miguel” said that “Complices” contained many adult plots and complex themes that were hardly suitable for young children.

As further evidence that the program did not comply with the rules, Mr. Subervi noted that 80 percent of the advertising during the show was geared toward adults.
http://www.nytimes.com/2007/02/24/bu.../24fcc.html?hp





'Content' is King Again — This Time, on the Cellphone
Eric Sylvers

Hundreds of executives from San Francisco to Mumbai are descending on Barcelona this week to promote new ways to watch, listen to and share content over a mobile phone. The irony is that they may sound a lot like the new ways that people are watching, listening and sharing over their personal computers.

User-generated content, typified by the video- sharing Internet site YouTube, is now invading the mobile phone. Vodafone, for instance, struck deals last week to bring YouTube, the social-networking site MySpace and the online auction site eBay to the cellphones of its subscribers.

CBS, the U.S. television broadcaster, last week began selling television clips, games, ring tones and other content linked to the company's programs, designed just for cellphones.

For executives and many industry experts gathering at the 3GSM World Congress in Barcelona, the question is no longer whether cellphone users will use their phones to download music, video, games and adult content, or to watch broadcast television and made-for-mobile movies, or to search for a local restaurant, gamble and update their blogs. The question is how soon.

"What people take for granted on the computer, they'll soon start embracing on the mobile phone," said Daniel Winterbottom, a senior analyst with Informa Telecoms and Media, a London- based consultancy.

Those out on the road taking photos and videos no longer have to wait until they reach a computer to update a blog, send a snapshot to a photo site like Flickr or fine-tune a profile on MySpace. With a few clicks, or sometimes in just one click, a video or photo can be sent from a mobile phone to dozens of Internet sites, where they can be viewed by both cellphone users and the deskbound masses at their computers.

The market for mobile content and services will be worth $150 billion in 2011 compared with $89 billion last year, according to a forecast by Informa. Of the total figure, $13.2 billion is expected to come from user-generated content — like the videos found on YouTube — and the services surrounding it. That compares with $3.5 billion in 2006.

M1, a mobile phone company with a 30 percent market share of Singapore's four million cellphone users, last month introduced a service that allows clients to upload or download videos for 21 Singapore cents, or 14 U.S. cents.

Customers are paid 5 cents in phone credit every time somebody downloads their video and, much like on YouTube, four or five recent postings are shown on the phone along with four or five of the most viewed.

"People have these advanced handsets, but they aren't taking very many videos or sending them to people, so we wanted to encourage them to do that," said Neil Montefiore, the chief executive of M1.

As cameras capable of taking photos and videos become almost standard on mobile phones, the number of people sending videos to sites like YouTube is forecast by Informa to jump four times by 2011 to 198 million.

But with mobile content still in its nascent phase, questions abound on the most basic issues — whether there should be advertising, how the content should be delivered technologically, and how revenue should be split among the carriers, the content producers and the companies between them.

The field of companies seeking a slice of the market for user-generated content includes ShoZu, a London-based company that lets users send their content as files from the phone to the Web in one click; and Yospace, a British mobile blogging pioneer that uses multimedia messaging to upload content from cellphones.

ShoZu and similar products can be downloaded only onto certain kinds of phones at present, but the number of compatible handsets is increasing, and in some cases the software is being loaded onto phones before they leave the factory. This and the increasing familiarity of subscribers with the services will give a lift to the market for user-generated content, according to industry experts.

"We have already seen a rapid evolution of the market," said Jen Grenz, co-director of marketing for ShoZu. "First people were really into photos and they couldn't quite get their head around sending video to the Web from their phone, and now people are posting their videos directly from the phone to YouTube."

User-generated content is expected to increase along with faster mobile phone networks, in an evolution similar to what happened with the advent of broadband fixed-line Internet access.

Industry executives played down concerns that the slow upload speeds of even the faster mobile networks will hinder the pickup of user-generated content; while photos and videos are being sent to the Internet, they say, the phone will be available for all of its other functions.

But there are pitfalls that could delay the expected explosion of non-voice "content" on mobile phones, chief among them the high cost of data traffic. Content producers and many analysts emphasize the need for flat-rate plans and clear pricing, both of which they say will encourage usage.

"The real problem slowing down the diffusion of user-generated content and other types of content is overly expensive and hard to understand data tariffs," said David Springall, co-founder and chief technical officer of Yospace. "Some operators do provide bucket plans for data, but for many carriers it's cost prohibitive to send a lot of data."

Despite the rise of user-generated content, the prominent role of professionally produced content will remain. That part of the business is highlighted by the release this week by the Sundance Institute and the GSM Association of five made- for-mobile short films. In a similar bid to drum up interest in the video potential of mobile phones, several films by a well-known Bollywood filmmaker will also be presented in Barcelona.
http://www.iht.com/articles/2007/02/.../btcontent.php





Drops DRM

Puretracks Takes Lead in Rights Fight
Peter Nowak

Canadian download store Puretracks is turning up the volume on the free-the-music movement by selling songs online without copy protection.

Toronto-based Puretracks Inc. yesterday announced it was selling MP3 files from independent labels, including Nettwerk Music Group, Independent Online Distribution Alliance and England's Beggar's Banquet, without digital rights management (DRM), or the technology that restricts how a song can be copied and transferred.

The site's unprotected catalog, which includes artists such as The Barenaked Ladies and Sarah McLachlan, will initially feature only 50,000 of its 1.3 million tracks, but will grow weekly, said Alistair Mitchell, president and chief executive. The songs will also be playable on devices they previously did not work on, such as Apple Inc.'s iPods, and the offering will grow to include tracks from major record labels.

"There's no religion here, there's no one-size-fits-all solution. Different content owners and different artists have different perspectives on how they want to get their music into the marketplace," Mr. Mitchell said. "We wouldn't be offering this if we didn't think it would grow our revenues. We're going to help those label partners we're working with sell more of their music; that's the bottom line."

Puretracks' move comes on the heels of an open letter by Apple CEO Steve Jobs to major record labels two weeks ago in which he urged the dropping of DRM to fight piracy and spur sales of legal online music.

Apple's iTunes music store, which commands more than 90% of the legal market with more than two billion tracks sold in 2006, is facing slowing sales -- a fact Mr. Jobs blamed on the value inequality between downloaded tracks and those bought on CDs. Consumers can copy and transfer songs from CDs as they see fit, but are faced with restrictions on downloaded tracks, which is a disincentive to purchase music online, he wrote.

Mr. Jobs' letter prompted different reactions from the major labels, with Warner Music CEO Edgar Bronfman saying the argument for removing DRM was "completely without logic or merit." London-based EMI Group, however, is reportedly exploring the lifting of DRM restrictions on its music. Warner this week annouced a new bid to acquire EMI.

Although Puretracks is a relative minnow compared to iTunes, its move is the tip of the iceberg and will put pressure on the major labels to drop DRM, analysts said.

"Consumers do not want to buy anything with DRM on it unless it provides them with some additional value," said California-based technology consultant Rob Enderle. "It is fundamentally not working and it's just taking a long time for the industry to admit it."

Most music DRM is likely to disappear within the next three years and protections on video downloads are sure to follow, he said.

Nettwerk Music president Ric Arboit agreed and said his label has always wanted to sell unprotected music, but the majors dictated the way online stores such as iTunes and Puretracks were initially set up.

"We would have done it from day one if it was available to us, but when it came to the indies, that's what they had in place."

Mr. Arboit said Puretracks is Nettwerk's third-largest online seller, behind iTunes and U.S.- based e Music, which sells only unprotected music from indie labels. Puretracks' move will significantly boost Nettwerk's online sales within 45 days, Mr. Arboit said.
http://www.canada.com/nationalpost/f...f-54991a0587be